Not sure if this will help, as I don't do telnet (not a fan of sending my user/pass clear text across the 'net!). But, I use SSH on my Treo600 using TuSSH. It's rough using the small screen, but it helps me with some basic stuff for remote diagnostics on a number of Solaris, FreeBSD and Linux boxes.
You can download it here
http://www.tussh.com/
Doesn't support telnet from what I can see...but thought I'd throw it out.