Luckily, yes. It had an Ethernet port and TCP/IP, so once it was up and running, getting it on the 'net wasn't too bad. The biggest challenge was actually getting the IT dept. to assign us an IP address, etc. Luckily I knew the IT guy pretty well from doing work-study with him earlier, so it wasn't too bad.
On the other hand, while you could telnet to the thing, you couldn't really use plain old command line telnet, which usually assumes something like a VT100 or VT200 terminal. AS/400's usually want 5250 terminal emulation, not VT100/220. So I had to find a 5250 terminal emulator to use to connect to the system and actually work with it.
I'd write something about my experiences, but it was all so long ago now that I doubt I remember enough details to make it interesting. Still, something like this would be a fun project to do again in some ways. I've even toyed with the idea of doing something like the guy in this talk, but with an AS/400. The biggest reason I never did, other than the size/power/cooling issues, was the software licensing. I imagine an actual OS/400 license is crazy expensive, and if I just wanted a Linux server on vintage hardware, I would just fire up one of my extensive collection of old Sun SPARC boxes. :-)
A normal telnet connection will be assumed to be something VT100-ish, so it won't try to use EBCDIC. If you send one of a few specific values for the terminal type, though, the AS/400 will use block-oriented EBCDIC comms. This is even documented in RFCs 1205 and 4777.
A bigger issue can be with trying to send each of the 24 function keys when a VT102 didn't have any.