Just wanted to know about telnet ... nmap !!!?

we have two machines.... and installed nmap on one machine to learn something about security. Found telnet open port via nmap.... my question is... how hacker can entered (how they can use) in that machine (ex, telnet, port:23) without knowing username and pwd ??? And, i don't know... how we can say telnet ping details in clear text ... ? Is it possible to see those text by any tool ? some example plz !!!