Highly disappointed that versions 0.6.0 1.7 and above has telnet access removed completely
I registered my dismay on this a couple of weeks ago and Ive now been sent a new version that has telnet access enabled. 
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To invoke a login screen in telnetd the syntax is :
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telnetd -l /bin/login
Sorry if Im being thick, but Im a windows users who knows little about linux cmds, so dont know how to proceed

I access the modem by TTL serial adapter conected to the header J7. ( user admin / password 1234 ).
I changed the way that telnetd is invoked.
The original rcS file calls telnetd without any parameters.
Changing the file to telnetd -l /bin/sh produces a root console via telnet without login screen.
Changing the file to telnetd -l /bin/login produces a sh console with classic login screen.
The changes was made using FMK.
Since the new Tplink firmwares for Lantiq are signed, the update page doesn't accept the files.
The changed firmware could only be flashed using U-BOOT + tftp.
http://wiki.openwrt.org/toh/tp-link/td-w8970