I found something interesting about the various UNIX and LINUX distributions today. Commonly they limit the number of incoming TELNET and other sessions to something like 30 or 60, but finding how they do this is a real real pain. The settings are contained in the file /etc/xinetd.conf which is the process that spawns all the other listening processes. Notice the instances = 30 below.

defaults
{
        log_type        = FILE /var/log/xinetd.log 
        log_on_success  = HOST EXIT DURATION
        log_on_failure  = HOST ATTEMPT
        instances       = 30
        cps             = 50 10
}

Well, this can be changed to instances = 128 or instances = unlimited. Once this is changed, xinetd needs to be restarted with the command service xinetd restart or /etc/rc.d/xinetd restart.