In Pathpilot, feed hold or the space bar on the keyboard will pause the program, the spindle keeps running though.
cycle start will restart the program.
I havent had the Z problem you refer to with pathpilot?? were you using a conversational program? I dont use those so I cant be much help there.
I have never had the program make a miscue with pathpuilot, I have been using it since its inception on an 1100.
The Z problem happened several times in Mach 3 though.3