sadly, i cannot remember the exact application that was being built, but the information i can give should help some: after executing step2, apparently gcc 3.2 does not include the c++ compiler or has other problems. when first i tried to run step3, a configure script told me that the c++ compiler could not create executables. i wrote a simple hello world test, and found that the compiler could compile, but when executing the binary apparently linked it to a libstdc++ that could then not be found. i ran step2 again, and after that no c++ compiler could be found. when i manually linked c++ to gcc, it said that no c++ compiler had been installed. no amount of running step2 could change that. then i manually emerged gcc and binutils (which were already the updated versions) - i had a running c++ compiler. when running step2 again (to make sure it was finished) there was again no c++ compiler. so yet again i emerged gcc and binutils, then commented out that part of step2, ran step2, and now step3 succeeded. hope that helps. my suspicion is that it's to do with the 'export USE="-* build bootstrap"' line in the script, but i have not looked into that. maybe -* removes c++ support? hope it helps!
I think I've figured this one out... I'm REALLY unsure how this worked for some people and not others though. As it turns out gcc is not a prerequisite of anything in emerge -e pam-login, so it wasn't rebuilt before the C++ apps that were trying to use it... Grab step3 again and try that. Lemme know how it goes. http://www.gentoo.org/~carpaski/system_update/update-step3.sh
This will be fixed by either or both of the fixes I've implimented in the docs and code.