Ehmm...you are totally confusing things. Telnet has very little with servers to do. Telnet is simply a protocol, just like HTTP (web-pages) and NNTP (usenet, newsgroups). If you really want telnet access to your computer (trust me, you don't, if you need remote administration then use SSH as it is encrypted) then Linux comes with a telnet server as default. DOS is definitely NOT coming with a telnet server as default, neither is windows (though it does come with a telnet client, of course linux has a dozen variants of those as well).
You might want to do some reading on the subject...let me find something for you:
http://www.networkcomputing.com/unixworld/tutorial/013/013.part1.html(haven't read it but it looks promising)
And you can always try searching for "howto set up a linux server" (the real option for windows would be Windows 2000 Server, which won't run on your hardware and costs several hundred dollars => not a good option). With all due respect, asking which is better as a server of "telnet" and "linux" is not the best starting point so try to learn a few more things before starting off...
