Telnet is the application that allows you to log on to other Internet servers and use their information. MUDs (MOOs and MUCKs, etc.) and IRC are examples of applications that use Telnet.
Telnet's official name is NCSA Telnet, just as Mosaic's official name is NCSA Mosaic, because they were both developed at the University of Illinois' National Center for Supercomputing Applications.
"Telnet" can also be used as a command or a verb, as in "I telnetted to that location", which indicates that you used Telnet to connect with the other Internet host. Most Telnet services offer on-line help; try typing "help" or "info" or "?" if you need of assistance while using Telnet.