(1) rlm_eap_peap: Had sent TLV failure, rejecting (2) modcall[authenticate]: module "eap" returns reject for request 7
the error is (2) and more precisely (out of your log):
rlm_eap: EAP/mschapv2 rlm_eap: processing type mschapv2 rlm_eap: Freeing handler modcall[authenticate]: module "eap" returns reject for request 7 modcall: group authenticate returns reject for request 7 auth: Failed to validate the user.
it seems that mschapv2 can not authenticate the user "user3". are you sure that:
a) mschap module is in your "authorize" and "authenticate" sections of your radiusd.conf file?
b) you type the right password at the XP prompt?
ciao artur
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