If you don't know what is GNS3 then follow THIS link.

now let's move to our topic.

i really hate xterm so i prefer to use gnome-terminal to access devices in GNS3 so what you need to do if you hate it too is :

1- In GNS3 go to Edit >> Preferences

2- In the right you will the following beneath the Terminal command:
xterm -T %d -e 'telnet %h %p' >/dev/null 2>&1 &

Replace it with:
gnome-terminal --command='telnet %h %p' >/dev/null 2>&1 &
3- we are done now ( enjoy your lovely terminal )