I have tried to install Dovecot v1.0-rc17 from source on Fedora Core 6, and experienced the problem in "telnet localhost 110" with "authentication failed". After I contacted the author of Dovecot, he gave me the direction to find out the solution.

1. The file "dovecot" is missing during Dovecot installation. So crate the file /etc/pam.d/dovecot with the following content.

#%PAM-1.0
auth required pam_nologin.so
auth include system-auth
account include system-auth
session include system-auth

The content is copied from the yum installation version.

And change the variables in dovecot.conf file.

protocols = imap imaps pop3 pop3s
disable_plaintext_auth = no
pop3_uidl_format = %08Xu%08Xv
mail_extra_groups = mail

Then you should be able to do "telnet localhost 110" without problem.