1) I have to incorporate an IBM mainframe OS OS390 that is being used for legacy ........
Try WRQ They have some terminal emulation software that may help you.

2) Second issue is Remote storage and Manipulation of Applications in a Centralised ......
You will get more bang for the buck if you went with web/http enabled applicatioins and used something like what Neoteris has to offer, they were purchased by Netscreen and have an awesome SSL VPN gateway.

3) Third issue is to provide the travelling employers remote connectivity to the ......
Again somebody like Netscreen would handle this challenge. You don't have to redesign your internal applications.

4) Another important issue is providing internet connectivity to the organisation,.......
It all depends on what you will be using the internet connectivity for, Web Browsing, vpn access, ftp, remote administration? how many users will need internet access? VOIP is something you definitely want to do a little design work on. Bandwidth, QOS are very important pieces when it comes to VOIP. Talk to a VOIP vendor and let them tell you what you need. Video conferenceing tends to be a bandwidth hog and will soak up as much bandwidth as you give it. I think a single T-1 will not be enough for your applikcations.

5) They are using Frame Relay at the moment with FRAD's, Do you guys think that they
Do you have a bandwidth problem with the existing Frame, an upgrade is not cost effective unless you can show good ROI. Upgrading bandwidth is hard to show ROI unless you have serioius latency issues or some other application that will run on it that can justify the upgrade.

6) What issues at Client's end should be considered keeping all the scenario in mind?.....
Make sure your outer network perimeter is guarded (ie firewalls, IDS, DMZ's, etc.), make sure you have all client computers virus proteceted and patched. If you have no written policy's, then you need to get upper management to back you on getting some written and abide by them.

7) For remote administration I am looking into Telnet and SSH Servers and I guess it
Remote adminstratioin for what? Each device has it's own way of administration. It may be SSH or telnet, or some GUI based admin tool. But I get your point.

8) Security is something which I really learned from Antionline? I have considered.......
Antifvirus, IDS, HIDS, firewalls, sniffers are a must have in most medium to large businesses. Honepots, are a different story. It looks to me like you have your hands full with getting a network up and running and in place. If it were me, I would spend less time putting some device on my network that specifically invites the hackers in. Read up a little more on Honeypots and see if you in fact would like to use one on your network. I view honeypots as being more of a research tool, and with the projects you are embarking on, when will you have time to administer a honeypot?