Ben: Hmmmm... I thought it duplicated the routers MAC addresses to the modem's outside interface and then blindly forwarded packets?
You got the idea but thats a 'full' bridge mode. Half bridge leaves the modem in control of the PPP-over-ATM (authentication & encapsulation) and uses it's TCP/IP stack to deliver the WAN IP packets straight from out of the PPPoA layer to your PC/router (and not through it's NAT engine).
The PPPoA ADSL topology is ugly compared to PPPoE ADSL or ethernet, it looks a bit like this;
Physical Link Link Transport Data?
ADSL ATM VCs PPP IP UDP/TCP
Bridge mode -----/ |