By default, Vista installs without telnet available.
Here is how to enable telnet in Vista:
1. Open ‘Control Panel’
2. Select ‘Programs and Features’
3. In the left column, select ‘Turn Windows features on or off’ (get ready for the annoying UAC prompt)
4. Check the box next to telnet (and any other obscure services you may want enabled), and wait while Vista thinks for a while.
Source: http://www.arsgeek.com/2007/03/20/enable-telnet-in-windows-vista/