That app note refers to dynamic VPN with Junos 10.4. There were some important new functionality added in 10.4 with regards to dynamic VPN. So not everything there will work with 10.2R3. There is a different app note for pre-10.4 releases. However given that you do not plan to use Radius, I would seriously consider upgrading to 10.4R3 to get local IP pool capability for xauth. With 10.3 and earlier, IP assignment must be via Radius. Once upgraded then give the app note you are using a try. It should work if you follow all the steps with 10.4R3.