Thanks for the advice and links. I looked through some of the commands however I'm still having issues though. When I attempt on Microsoft Telnet to connect I don't even get prompted for a password anymore - I get the following:

Access Denied: Specified user is not a member of TelnetClients group. Server Administrator must add the user to the above group.

?
Also, XP SP2 has set the telnet service to default as disabled. All the services associated with telnet and telnet itself is running (On both XP boxes - neither are servers). What am I doing wrong?