No it does not just a windows box shows up saying it cannot find the file the only option is to click ok. No telnet window opens up.
What OS is the problem seen on ? It is possible that application is not able to create the required batch file in the user home directory.
In the user home dir for eg: C:\Documents and Settings\
If the operation still fails, it could be some other error - you could post the text from java console which can be opened by clicking F2 when the application window has focus.