I've created a standard for MUD clients to communicate their support
for several protocols that are difficult to negotiate by traditional
means, most notably the use of UTF-8 character encoding, and support
for 256 colors.
MTTS is an extension of RFC1091, the Telnet Terminal-Type Option.
Support is planned to be added to the TinTin++ MUD client as well as
MTH, a telnet handling snippet for MUD servers.
The specification is available here:
http://tintin.sourceforge.net/mtts