qmail-smtpd error: 502 unimplemented

[Kristina]

 have qmail-smtpd setup using inetd. .
However when I try to send mail by 
telnet localhost 25. I get the following error:

502 unimplemented (#5.5.1)  　***ERROR HERE****

Does anyone know what may be causing this?

Thanks in advance,
Kristina