What exactly causes this? I'm streaming movies, so this is likely to be an issue with the buffer filling up (bandwidth being lower than streaming rate--ideally I just want to get informed and take an action if the buffer is full, like skipping frames)

How would I go about colorizing the output sent to the client?

Doing a client.end() or client.destroy() on interrupt signal throws an exception claiming This socket is closed but omitting it makes it so that the telnet client wont be able to receive any data but the data event on the server still fires. Any ideas?

Clients which properly escape their NAWS sub negotiation will show incorrect window sizes if the width or height is 255 characters.

As required by the Telnet protocol, any occurrence of 255 in the
subnegotiation must be doubled to distinguish it from the IAC
character (which has a value of 255).

Putty:
Buffer 00 fe 00 19
window size is 254 x 25
Buffer 00 ff ff 00 19 <- The value of 255 is escaped.
window size is 255 x -256

WinTin++
Buffer 00 e6 00 16
window size is 230 x 22
Buffer 00 ff 00 16 <- The value 255 was not properly escaped?
window size is 255 x 22