More questions and answers can be found on the KTelnet2 frequently asked questions page.
4.1. KTelnet2 hangs up each time I start a connection with a plugin. What's wrong and what can I do?
KTelnet2 writes some data into a pipe. The plugin has to read this data. If the plugin cannot start due to a misconfiguration KTelnet2 hangs up. Clean the pipe with cat /tmp/ktelnet2... (check for the name) and change your configuration. This problem does not occur any longer with version 0.4 of KTelnet2. Here the pipe is not opened before the listening program has opened the reading side of the pipe.
By default there is not distinguished between ssh1 or ssh2. You can globally use a certain program by setting the appropriate command in the configuration (see the configuration section) or you can simply write a small shell script as a plugin (see the plugin section) or get a plugin from me.