quick hack:

setup debian as per riocar.org faq
adduser username
setup dns (add "nameserver x.x.x.x" to chroot'd /etc/resolv.conf)
apt-get update
apt-get install telnetd
apt-get install rsh-server (if wanted)
/usr/sbin/inetd (probably should add to init.d properly so it gets started on reboot)