Fortunately for you, telnet is really quite simple. I'll explain why anybody who knows anything about servers and protocols swears by telnet.
But first, I'll explain it's originally intended use. Telnet servers developed into well developed remote shells. In other words, by firing up telnet, and connecting to a telnet server, you can tell that server to execute various commands kind of like you do in a DOS window. Since most telnet servers are/were on linux/unix systems, the commands were exactly what you'd find on a linux/unix system. So if you want to learn how to navigate around on a telnet server, then learn about linux commands. Usually however, you don't need to for the server will tell you what to type to accomplish whatever services they're making available to you.
Now, how does telnet work? Well, a connection is established between you and the server you chose. Everything the server sends back on that connection is displayed on your telnet screen. Everything you type on the telnet screen is sent to the server. In other words, it's a RAW communication between you and a server. Such a simplistic and low-level functionality makes it very useful and powerful. For example...
Internet Explorer is a browser as you know. It's designed to connect to web servers and request files off of that server so that it may display them for you. The web server and Internet Explorer talks to each other in a very specific way called the HTTP protocol. You probably knew all that too. Well, you don't get to see what all the browser and the server is sending back and forth. Makes ya kind of curious doesn't it? What ARE they saying anyway?
So you pop out the ole telnet window. You connect to www.yahoo.com
on port 80. Great, now we're staring at a blank screen with a blinking cursor - nothing is happening. The webserver is waiting for you to request a file. No more internet explorer to do it for you - you gotta type it AAAAAAAAALL out yourself. So here we go:
GET /index.html HTTP/1.1
After typing the above and pressing enter a couple of times, suddenly the server spews out this huge mumbo jumbo of HTML. You've just successfully requested a file from a webserver.
So that's all there is to it really. Many people seem to think there are special "commands" that you need to memorize to use telnet. But that isn't true. Telnet is only a RAW connection between you and a server. The "commands" are based upon what kind of server you're talking to.
So finally, here's the answer to your question. To effectively use telnet, you need to learn as many protocols as you think are interesting or useful. Secondly, if you have any desire to communicate with telnet servers, it may be worth learning how to get around linux.
Finding learning resources should be a cinch. Just search - for example - the following things:
HTTP Protocol tutorial
SMTP Protocol tutorial
POP3 Protocol tutorial
FTP Protocol tutorial
IRC Protocol tutorial