Sonofslim is right about using your FTP program instead of Telnet. Don't be too literal in your reading of the instructions. Your next step is really to change the file's permissions, you can do that from a command line using Telnet but you should be able to use FTP to do the same thing.
Maybe I can explain what you're trying to do in this step and why FTP can be used for it. "cgi-bin" is a directory (or folder) on your web server. Some servers, generally for security reasons, will only run web-accessible programs (like your guestbook) when their files are in the cgi-bin directory. On a Linux (or other UNIX type) system, the way you'd indicate that a file is a program is by changing its permissions to indicate that it can be run. That's why you want to both place guestbook.pl into the cgi-bin directory and change its permissions.
The command you have in the instructions:
chmod a+rx guestbook.pl
is used to do that. In this command the + indicates that you're adding a permission, the r means that you want the file to be accessible (readable) and the x means you want the server to treat it as a program (x is from "execute" as in "run" a program). So, once you have used this command, the server will understand that guestbook.pl is a program that you and other users may access and run.
Before using the command the server will probably think that guestbook.pl is just a text file. If you try to access it from a web browser, it may send you the file's contents or it may give you an error. I'm leaving out some detail, but that's the general idea. Your job now is to find a way to modify guestbook.pl's permissions to make it accessible and runnable. You could log in to the server using Telnet, assuming that your hosting provider even allows that, or you can use an FTP program to do the same thing.
Since you've already used FTP to get guestbook.pl into the remote cgi-bin directory, you already know how use FTP and how to "open" cgi-bin. What you want to do is this:
1. Use your ftp program to connect to your web server.
2. Find the cgi-bin directory and make sure that guestbook.pl is really in it.
3. If it is, then try right clicking on guestbook.pl (this step will be different depending on what FTP program you're using - you may have to use a menu option instead of right clicking). See if there's something like a Get Info command available. What you're looking for is a screen that will probably have a grid of 9 checkboxes that say something like "User", "Group" and "World" and "Read", "Write", "Execute". You want to place checks in the three "Read" checkboxes and the three "Execute" checkboxes. You also want to have the "Write" checkbox for "User" checked. (It's hard to be specific without knowing what FTP program your using but that's the basic idea.) Doing this will produce the exact same result as using the chmod command from Telnet.
4. Once you've done this, you should be able to move on to the next step in your Guestbook's instructions.
If you have trouble doing this, if you let us know what FTP program you're using, I'll bet someone here can tell you exactly how to do step 3 with it.