1st let me talk to my friend Auswipe.
Telnet is perfectly fine in a trusted network. I also work for a large company(telecom) and we have a "secure" firewall. I know what you are saying about sniffers gaining passwds over telnet, but telnet is a fairly safe way to do business in a "secure" environment.
NOW TO THE TOPIC AT HAND.
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MY 2 cents... I know your question is regarding SUN, and my box is HPUX but there is another banner that is used.
/usr/localcw/opt/sysguard/banners
You might look under the directory /usr and search for a file with "banner" in the name.
The files that are under /etc are used on my box only for the bootup screens: namely /etc/issue and /etc/copyright.
Hope this helps even though it is HP and not SUN.