Q: When I try to telnet into my machine from another machine as user root, it kicks me out. What am I doing wrong?

A: You are not doing anything wrong. This is the default installation behavior of Solaris. It can be changed, but is considered to be a security risk. If you wish to change it read on. Otherwise, create another user account and use that to log in via telnet, or preferably, SSH.
SUMMARY:
1) Edit the /etc/default/login file.
2) Log in remotely as root.

DETAILED:
1) From the local machine, edit the /etc/default/login file. Type:
vi /etc/default/login

Look for the line in the file that reads:

----- BEGIN SCREENSHOT -----

# If CONSOLE is set, root can only login on that device.
# Comment this line out to allow remote login by root.
#
CONSOLE=/dev/console

----- END SCREENSHOT -----

Using your vi skills, comment out the line that starts with CONSOLE= In order to comment something out, you just put a # sign in front of it. The line should end up looking like this:

#CONSOLE=/dev/console

Save the file and quit.

2) Log in remotely as root.
Go back to the remote machine and telnet into the box you just edited /etc/default/login file on. You should now be able to log in as root with no problems. Keep in mind this is considered a security risk. Unless this is a "play" machine, you should not do this.