You will place use-tunneled-reply=yes in peap config.
This is right config 3Com 4500(V3.03.00):
#
domain default enable company
#
dot1x
dot1x authentication-method eap
undo dot1x handshake enable
#
radius scheme Radius
server-type extended
primary authentication x.x.x.x
primary accounting x.x.x.x
key authentication qwerty
key accounting qwerty
user-name-format without-domain
#
domain company
scheme radius-scheme Radius
vlan-assignment-mode string
accounting optional
#
#
interface Ethernet1/0/1
stp edged-port enable
broadcast-suppression pps 3000
packet-filter inbound link-group 4999 rule 0
dot1x port-method portbased
dot1x
#
File "users":
username Tunnel-Type = VLAN
Tunnel-Medium-Type = IEEE-802
Tunnel-Private-Group-ID = "2"
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