Could it really be that MS decided to remove telnet from Vista? Yes, they did, but there is a way to get it back.

While trying to configure my Thomsom SpeedTouch 780W using the CLI guide i noticed Vista is missing the Telnet Client, what is this, did they forgot it or did they remove it on purpose?

It seems intentional, but there is a way to get it back, eg:

Open a Command Prompt with Administrator privelages
Type: start /w pkgmgr /iu:"TelnetClient"