<p>I would like to implement a telnet server in C. How would I proceed with this? Which RFCs should I look at? This is important to me, and I would appreciate any help.</p>

For very basic telnet (just telnet to a port and echo bytes), there's not much to do.  Read from a socket, process it (in an echo server, do nothing), spit back a result.  You could implement a simple MUD-style server without knowing anything in any RFCs.
But if you're really concerned about RFCs, RFC 854 might be a starting point.
http://www.faqs.org/rfcs/rfc854.html