Yeah, I was thinking that maybe the vncviewer didn't have encryption support, but apparently that's not it (or at least not all of it).
Well, I'm not entirely sure how safe it is. I've never managed to brick my n810 by installing arm .deb packages, but I can't necessarily promise that they won't break your n900. I would assume that in the case of a telnet app the worst-case scenario is that it simply won't run. What I would probably do is try too install it and if it says it's going to need to remove or upgrade any other packages, say no (it'll prompt you if it thinks it needs to). It _may_ not be 'optified', so it might use your root partition for storage, but it _should_ be pretty small. Here's the deal:
1. Download the armel .deb file to your tablet.
2. Open an xterminal.
3. Type this and hit enter:
find / -name telnet-client_0.17-36_armel.deb
4. That should show you the path to where it's stored (for example, /home/user/telnet-client_0.17-36_armel.deb)
5. Type the following to install it, substituting the full path name for _pathname_:
sudo dpkg -i _pathname_

If the package doesn't require any additional dependencies, it will just install. If it does, it will tell you what it wants to install/remove/upgrade and prompt you Y/N. As long as you don't remove a bunch of packages on accident (by saying 'Y'), I wouldn't think that it would be terribly risky-but I can't say for sure without trying it out. If you can wait a few days, my n900 apparently shipped today and I should have it by the end of next week; I'm more than happy to test it out on mine first. VNC is going to be one of the first applications I install, and I'll eventually need telnet anyway. I'm happy to keep trying to troubleshoot with you, but without something (telnet) to try that port from the tablet I'm sort of stuck; it sounds as though you have everything in order over there.