I am using Fedora 8 Live CD to boot my system. After boot I went to services and enable SSHD (Secure Shell Demon). After that I try to telnet that computer from come other computer or from same computer with its IP address. It gives me error like- you cannot connect to 172.16.1.60 ..... . What is the problem. By the Firewall is disabled and I have LAN working....Please let me know how can I set telnet or SSH server and how can I access this machine from other machine in same LAN. Please give me step by step working solution. Thanks...
I myself tried lot, even on Fedora 8 and also on Knoppix 5.0 but could not get working.

You can't connect to SSHD with telnet (ssh is the "encrypted version of telnet").
You need to connect with a SSH client to your SSH server (in most systems ssh clients come preinstalled, just `ssh 172.16.1.60`.

If you are connecting from a crappy operating system, like Windows, you need to get a ssh client, like Putty.