The search button goes dead when you are not connected to the network. As you probably know, Gnutella has no central servers, you must find other peers to connect to. Sometimes (perhaps often) you will find that you are temporarily not connected to any other peers. When this is the case, you cannot search, since you are not connected to anything, so the search button deactivates.

Dead button may be annoying, but I think it would be even more annoying if the button didn't go dead when you were disconnected. That would let you press it and wonder why there were no results. The dead button just prevents you from trying something that is temporarily (until you get some connections) impossible.

Give it some time to reconnect, and you can search.

Not sure what Telnet has to do with anything though