CONDOR FLT 610 (MCDONNELL DOUGLAS DC-10, GERMAN REGISTRATION: DADSO) WAS APRX 2 HRS LATE AS THE FLT CREW MEMBERS WERE PREPARING TO TAKEOFF. SUBSEQUENTLY, FLT 610 WAS CLRD FOR TAKEOFF WITH INSTRUCTIONS TO CROSS THE 5 DME (ON THE STANDARD INSTRUMENT DEPARTURE/SID) AT OR ABOVE 3000 FT. THE TAKEOFF CLNC WAS THEN CANCELED, BUT WAS REISSUED ABOUT 1 MIN LATER WITH THE SAME RESTRICTIONS. AT ABT THAT TIME, THE FLT WAS EXACTLY 2 HRS OVERDUE & THE COMPUTER DROPPED THE FLT PLAN DATATAG & BLOCK (AS PROGRAMMED TO HANDLE OVERDUE/UNUSED FLT PLANS). AFTER TAKEOFF, FLT 610 CONTACTED DEPARTURE CTL. THE CTLR NOTED ONLY A PRIMARY TRANSPONDER TARGET & OBSERVED NO ALT DATA. MEANWHILE, PIPER PA-42, N900MP, WAS ON AN IFR ARRIVAL FOR A VISUAL APCH TO PAL-WAUKEE ARPT AT 2800 FT. SUBSEQUENTLY, THE TWO ACFT CONVERGED & PASSED WITH ABOUT 2 MI (HORIZONTAL) & 200 FT (VERTICAL) SEPN. INTERVIEWS WITH THE CTLRS REVEALED THEY HAD INTENDED FLT 610 TO CLIMB TO 5000 FT AS PROVIDED BY THE SID. THE ERROR WAS NOT NOTED (WITH THE DATA TAG DROPPED FROM THE COMPUTER).