Ok... don't laugh at me... but I think I have a better idea of what's what after using my keyboard for a while.
At the guitar, I don't totally control the note on/note off events as I do at a keyboard.
using a Steinberger patch
When I just hit a note and then release it, the note decays quickly.
It effectively stops sound at the key up moment.
When I step on the sustain pedal, hit a note and let the key up, the sustain lingers, but it is not a 'hold' scenario like you get with some pads and Dim Pro stuff. You get decay like with a keyboard.
I feel like I made a big fool of myself with this thread, but there you go. The difference was in the expectation. Obviously I rarely use piano like patches where the sustain button works like a piano pedal just letting the string ring out. I'm used to the sustain/hold pedal actually keeping the note/pad going indefinitely.
Sorry for being stupid about it. Learning curve again.
I should say, that at one point, I couldn't sustain ANYTHING in Rapture, but after the initial re-install, that problem went away. (or maybe one of the dozens of reboots, who knows - I Reinstalled Rapture at least 4-5 times.)