This one worked, and looks pretty good. In Acrobat Professional, fonts reported are:

LMRoman10-Regual

LMTypewriter10-Regular

Pxsy

Rpxr

URWPalladioL-Ital

URWPalladioL-Roma

All Type 1.

But this one:

\definetypeface[iwona][ss][sans][iwona][default][encoding=texnansi]

\definetypeface[iwona][mm][math][iwona][default][encoding=texnansi]

\setupbodyfont[iwona][texnansi]

Caused:

(/usr/local/teTeX/share/texmf.local/tex/context/base/type-akb.tex)kpathsea: Running mktextfm texnansi-iwonar

mktextfm: Running mf-nowin -progname=mf \mode:=ljfour; mag:=1; nonstopmode; input texnansi-iwonar

This is METAFONT, Version 2.71828 (Web2C 7.5.5)

kpathsea: Running mktexmf texnansi-iwonar

! I can't find file `texnansi-iwonar'.

<*> ... mag:=1; nonstopmode; input texnansi-iwonar

                                                 

Please type another input file name

! Emergency stop.

<*> ... mag:=1; nonstopmode; input texnansi-iwonar

                                                 

Transcript written on mfput.log.

grep: texnansi-iwonar.log: No such file or directory

mktextfm: `mf-nowin -progname=mf \mode:=ljfour; mag:=1; nonstopmode; input texnansi-iwonar' failed to make texnansi-iwonar.tfm.

kpathsea: Appending font creation commands to missfont.log.

! Font \*iwona12ptsstf*:=texnansi-iwonar at 12.0pt not loadable: Metric (TFM) f

ile not found.

<to be read again>

                   \relax

\xxdododefinefont ...tspec {#4}\newfontidentifier

                                                  \let \localrelativefontsiz...

\fontstrategy ...me \fontclass #2#3#4#5\endcsname

                                                  \tryingfontfalse \fi

<inserted text> ...yle \fontalternative \fontsize

                                                  \fi \iftryingfont \fontstr...

\synchronizefont ...strategy \the \fontstrategies

                                                  \relax \fi \iftryingfont \...

<argument> \getvalue {\@style@ \fontstyle }

                                           \edef \fontstyle {\fontstyle }\if...

...

l.39 \setupbodyfont[iwona]

                          [texnansi]

? 

I'm gonna get that update to Context pretty soon. We'll see if that helps.