Hi Malcolm,

I have installed the kerberos services; same message: the remote system has refused the connection.
/etc/xinetd.d/telnet:
service telnet
{
socket_type = stream
protocol = tcp
wait = no
user = root
server = /usr/sbin/in.telnetd
disable = no
}

Meanwhile I tried ssh2: try to connect via ssh2 with a user, the following message will shown:

The server has disconnected with an error. Server message reads:
A protocol error occurred. Change of username or service not allowed: (root,ssh-connection) -> (scm.adm,ssh-connection).

All so confusing me...