How is that your Tivo is giving you a login prompt for your telnet session? Are you running some other telnet daemon that is not the one from Tivonet? TivoApp doesn't expect to get a login prompt. It understands how to recognize the bash prompt and send something as a result, but it does not anything like expect on Unix.
Is it possible that you are having TivoApp connect to something other than your Tivo?
When I run TivoApp, I get the login: prompt in the telnet window, but I never get a chance to enter my password.
TivoApp seems to hang at this point.