The VideoLAN Forums

Apparently adding the option --rc-quiet on the command line might help some of us (it removes the DOS-box display...)

I've had the same problem as well (though i'm using a java socket and not telnet but it's the same thing).
And apparently still no solution. What's weird is that it seems to be a windows only problem: when I put my code and VLC on a mac: no problem at all ...