I was happy to read in the telnetd manpage that:

 -u len       This option is used to specify the size of the field in the
              utmp structure that holds the remote host name.  If the re-
              solved host name is longer than len, the dotted decimal val-
              ue will be used instead.  This allows hosts with very long
              host names that overflow this field to still be uniquely
              identified.  Specifying -u0 indicates that only dotted deci-
              mal addresses should be put into the utmp file.

However trying this, it seems telnetd is still consing (figurelatively
speaking) resolved IP address to pass on to /usr/bin/login -h 

One of the mods I enjoyed doing under leenox was stripping out 
hostname resolution from various daemons.  I like the idea of having
a flag set which will allow this.  It seems the hooks are in place,
but there is no real test/functionality just yet.

I did try looking into inetd to see if inetd is actually just passing
on resolved IPs to telnetd, and I don't believe it is.  

smj