In IRC, control codes are used to format the text into bold, underline colour and so on.
The same applies for telnet connections. These codes are different in telnet connections, and include tohers for changing the way a clinet displays stuff including wheather or not text is echoed as typed.
Because of the way eggdrop is cross compatable between the two, on connection, you see these codes.
You can switchj between the two modes using the ".fixcodes" command.
Note: in 1.6.14 (when made available), a small fix has been made. This will fix issues where you may have to type the ".fixcodes" command twice.