Are you telnetting into port 8080?
Also, if you're updating an existing channel, you should be using the same key you used for packaging that channel in the past (using the rekey option on the Utilities page), not generating a new key. Otherwise, existing users will lose any data that's stored in the registry (like resume points and watched status).
My Channels: http://roku.permanence.com - Twitter: @TheEndlessDev
Instant Watch Browser (NetflixIWB), Aquarium Screensaver (AQUARIUM), Clever Clocks Screensaver (CLEVERCLOCKS), iTunes Podcasts (ITPC), My Channels (MYCHANNELS)