Is this a production server? You are aware that telnet sends passwords as clear text, so anybody monitoring your session will be able to learn your root password... You could login as a user and then su to root.
As I haven't used telnet in a few years, I don't know for sure if there's anything else. Are you sure you're using the right password? In ssh, you just change the line in sshd_config to say "rootLogin Yes"
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