You should get log output from the Telnet action if you choose 'All', but the log output that is generated is diagnostic infromation, not the response text from the server (you can get the response text too by choosing 'All + hex dump' but it will be formatted as a hex dump). If you're not getting any output, make sure you have the latest version of VBP (an update some time back fixed a logging issue on the network actions).
If you really want to get back the formatted output from something like ls, you would need to execute the command on the server and redirect the command's output to a file, then retrieve the file using FTP (see
http://www.kinook.com/Forum/showthread.php?threadid=210) and then log it to the VBP output using a Run Program command of
%DOSCMD% type "drive+path+filename"