I made a web based one using AJAX/Comet... and the server handled the telnet connections... and it works on my eReaders webbrowser so I'm covered if I actually wanted to do this... Also made one inside the MUD itself, so you could play old version of the MUD from within the MUD itself... good times...
I don't think it would be much fun on a KT if you need an on screen keyboard to type. It's not much fun with a keyboard for that matter. MUDs tend to scroll a lot, and the eInk screen is just too slow to update.
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