VLC has four terminal interface modules. These are rc, rtci, telnet and ncurses.
The rc module is a interactive command line interface. It allows you to type commands to make vlc do things. To start it, run vlc --intf rc. This is the default interface if no gui environment is available. To get started type "help" followed by enter. Starting with VLC 0.8.0 you can access this interface through a network with a telnet-client by using the --rc-host localhost:port option.
The ncurses module is something like a text-mode gui, built with the well-known ncurses library. Linux users should be familiar with this kind of interface. This interface is not built by default, you need to add --enable-ncurses to the configure call. To start vlc with this interface run vlc --intf ncurses.
The telnet interface will allow you to use the telnet command to connect to vlc remotely from the network. It is comparable to the rc interface, but less advanced. It can be launched by running vlc like: vlc --intf telnet. Starting with the VLC 0.7.x-series, you can control VLC's VLM-module with this interface to manage multiple simultaneous streams. Notice that you should use the rc-interface if you don't need this feature.