How is “putty” different from “telnet”?
There is a program called telnet as well as the protocol called telnet.
I assume you are talking about the programs putty and telnet.
telnet connects to a host with the telnet protocol over an internet connection and information is exchanged in clear unencrypted text which is why its use is generally frowned these days.
putty is a multi-protocol application that can talk to serial lines, internet telnet protocol and openssh (commonly referred to ssh) protocols. Why you use putty is to use the ssh protocol to communicate with other hosts and the communication is encrypted.
BTW, there is a program called ssh which is communicates over the internet using the ssh protocol as well.
Big time! As other writer as stated, putty.exe (mainly) is used for SSH connections (it's secure; encrypted) and telnet is non-secure (pure text) based program (and protocol).
Don't use telnet on open network, if you don't have VPN to destination. Use SSH!