There is an important distinction that needs to be made here. Traffic that flows out of a DSL connection changes form a few times along the way. When it leaves your computer, travels through your network and hits the modem, it is Ethernet traffic. Most consumer grade equipment defaults to 1500 and the modem your ISP sends you is also probably defaulted at 1500. If you were to change the MTU, ALL interfaces between your PC NIC and the modem (including the modem) would need to be changed.
Once it leaves the modem, it is officially on the ISP network and is running as ATM traffic. This interface, and the rest of the path, you will have no control over. ATM traffic runs at a different MTU typically, but it depends on the equipment and the network. For example, cisco ATM equipment runs at 4470. An ISP network's ATM cloud may consist of Juniper, Cisco, Alcatel, Nortel, Fujitsu, Adtran or any of many other vendors. It may also interface with other provider's networks and their equipment. In other words, you have no way of knowing what will happen to packets once they leave the prem - and your ISP may not even have an idea of the entire journey of a packet either.
Once it reaches the other side and becomes Ethernet again, the MTU on the other network will then be a factor. If you don't know anything about the network you're sending to, it is best to assume it is 1500.
Also, ATMs most likely will not be set to block fragmented packets. All that will happen if a packet too large for the interface's MTU comes through is that the packet will be broken down in to smaller chunks and passed on. This may not be the case with the network at the other end.
If you send packets that are equal to or lower than the Maximum MTU on the chain, they'll get through without a problem. If you send higher, there is a chance they'll fragment or even be discarded.
What it comes down to is that you really should be aware of the MTU across the entire path if you are going to use anything higher than 1500, otherwise it is safest to just default to 1500.