sys_term.c in telnetd in FreeBSD 7.0-RELEASE and other 7.x versions deletes dangerous environment variables with a method that was valid only in older FreeBSD distributions, which might allow remote attackers to execute arbitrary code by passing a crafted environment variable from a telnet client, as demonstrated by an LD_PRELOAD value that references a malicious library.
http://lists.grok.org.uk/pipermail/full-disclosure/2009-February/067954.html
http://security.freebsd.org/advisories/FreeBSD-SA-09:05.telnetd.asc
http://www.securityfocus.com/bid/33777