I can understand the NAT, but why even let the wireless router do PPPoE? After all, the cable modem too provides Ethernet for the LAN side (where the wireless "router" sits), so all that wifi AP/router has to do is talk Ethernet and let the cable/DSL modem frame it anyway it wants to the head end. Unless of course you want to cut the cable/ DSL modem out of the loop altogether and have the WiFi router speak directly to the DSLAM or what-have-you at the head end (Linksys et al sell such boxes, so perhaps that's what you are speaking of?).
And w.r.t NAT, NAT'ed NAT, though it’s a bit of a waste, should work fine, I think. I have three levels of NAT going on in my home network (thanks to the VoIP switch NAT, WiFi NAT, and then my work VPN access box's NAT) ;-).
--ravi