Solution:
To test your telnet client's VT100 emulation capabilities you can use "vttest".
vttest is a program to test VT100 compatible terminals and emulators.
Source files can downloaded from the Internet.
Once installed you can telnet to the host running vttest and run the Character Set test.
The Character set 0 should appear as below:
If you do not see the special graphic characters then your telnet client is not fully emulating VT100.
Note: some terminal applications default to "autodetect" the terminal emulation so you must manually configure this parameter to vt100.