If, after having issued the STARTTLS command, the client finds out that some failure prevents it from actually starting a TLS handshake, then it should just abort the connection.
I think the specification should state that servers MUST be able to understand backwards compatible Client Hello messages (provided that client_version is TLS 1.0 or later), and that clients MAY use backwards compatbile Client Hellos messages. Of course neither clients or servers can be required to actually offer the full protocols because the specification is just about TLS.
--Paul Hoffman, Director --Internet Mail Consortium