The simple answer is yes.
The longer answer depends on what protocol you're talking about.
Early versions of ACS supported only PAP and MSCHAPv1 via RADIUS to Windows.
Recent versions (I think 3.1 on) supported MSCHAPv2 which has many security improvements to v1.
Worth noting that the main challenge/response part of the protocol is between the client and the authenticating device. The AAA server see's only the result of the exchange.
Darran
