I have gone through this file too. I felt tough to understand. I want to filter out telnet server stuff alone from that tar file.
Also I want to run telnet server...... Can you help me that how to run telnet server and to filter telnet server alone? See ./configure --help on how to enable/disable specific clients or servers, something like: --disable-servers --disable-clients --enable-telnetd should work. See the documentation for telnetd and/or inetd for how to run the the daeamons.
