I've noted several providers, including a couple of better-known ones,
using RFC1597 addresses internally. While not a Really Optimal Solution, it
does work, and if you find yourself with only a couple of class C's to work
with.. I'd probably rather preserve them for my customers, and go with
whatever I had to internally, as long as packets still got from A to B.
The only services that should be affected by the use of such "bogus"
addresses will be traceroute and any routing information passed by the
Much more interesting is when you have to connect to several different
customers, many of whom have chosen 10/8, 172.16/16, or 192.168.1/24 as
their core network addresses.
Looks like Sierra is a customer of Phoenix Fiberlink, who is likely
dual-homed, since he's got a Sprint netblock transiting UUnet.
Hope that helps.