I was just looking at your Telnet Options issue again, and remembered that there are methods in Net::Telnet to negotiate Telnet Options.
As Net::Appliance::Session isa Net::Telnet, these methods will be available to you. However I assume you need to be actually using Telnet (i.e. it won't work for SSH or Serial connections).
For more info please see the Net::Telnet manual page.
Hope this helps,