Hi,
check, if /etc/inted.conf contains a line like:
telnet stream tcp nowait root /usr/sbin/tcpd in.telnetd
If it is remarked, remove the # and do a kill -1 on the pid of the inetd.
Check, if /etc/securetty contains pseudoterminals like pts/0, pts/1 and so on. They are needed or something equivalent.
Check, if your IP you want to connect from is listed in the /etc/hosts.deny. If yes, remove it.
Hope it helps,
later
zaxxon