As many folks have stated. Sun Alert 102802 and the patches are available on Sunsolve.
120068-02 SunOS 5.10_sparc: in.telnetd Patch
120069-02 SunOS 5.10_x86: in.telnetd Patch
I've had it pointed out to me that the patches are marked "Reboot after installation required". This is actually not the case and a bug has been logged to get the tags removed from the patch.
For what it is worth, I tested the fix by applying the patch while the systems were multiuser and the fix was immediate. I did not even have to restart the services. in.telnetd is fork/exec'd by ineted. It's generally short lived. Adding the patch replaces the binary that is exec'd. You do not need to perform a reboot to get this patch installed.