Hi Paul,
the term "telnet" is somewhat broad - in it's most basic form it's really just an open connection. ie you could make a Ternet Server simply by opening a listening port using NetSimple (in Server mode).
so the user types stuff into the "terminal" and um - well - what happens? That depends completely on you I guess. perhaps they type
HELLO
and you reply with
HELLO TO YOU
it's really completely up to you.
now some people think of telnet as a "command line shell to the operating system". You probably don't want to do that in this case though, because the security implications would be fairly dramatic.
But expand on your idea a bit and let's see where it goes.
cheers
Bruce