telnet does not work with Windows XP

When I telnet to Windows XP Pro, there are many problems:

1. Pressing the up arrow should show the last command. Instead the cursor simply moves up. Pressing the enter key does reproduce the last command.

2. CTRL+C sends some unknown character to the server, and does nothing.

3. Backspace sends another unknown character which does nothing.

Hitting enter after CTRL+C or pressing backspace also has no effect: both are ignored.

I've had a look at "man telnet" and there doesn't seem to be a solution.

I've been using this package for years and it's always been the same.

ProblemType: Bug
DistroRelease: Ubuntu 12.04
Package: telnet 0.17-36build1
ProcVersionSignature: Ubuntu 3.2.0-31.50-generic 3.2.28
Uname: Linux 3.2.0-31-generic x86_64
NonfreeKernelModules: vboxpci vboxnetadp vboxnetflt vboxdrv fglrx wl
ApportVersion: 2.0.1-0ubuntu13
Architecture: amd64
Date: Tue Oct 2 05:44:33 2012
InstallationMedia: Ubuntu 11.04 "Natty Narwhal" - Release amd64 (20110427.1)
ProcEnviron:
 LANGUAGE=en_GB:en
 TERM=xterm
 PATH=(custom, user)
 LANG=en_GB.UTF-8
 SHELL=/bin/bash
SourcePackage: netkit-telnet
UpgradeStatus: No upgrade log present (probably fresh install)