...Alrighty, id say disregard everything before this post...
First, id say get a better telnet client. Search for PuTTy on Google and download it. (standalone exe)
Second, is this server actually local on your network? If not you might not have the ports forwarded. So you might know about telnet, but nothing about networking.
Also, are you able to configure the server? If not, download FreeSSHd WAYYY better than the built in telnet server.
BTW, you can run an SSH or Telnet server on whatever port you damn well please! 80, 90, 1000, 9000 whatever.