Just to add my voice here, I was very unhappy that I had typed in the example SMS app and wanted to test it out... but could not connect. Of course, if I had come here and searched for 'telnet' I would have found the answer right away, but instead I tried port 5554 on a whim. I agree, the documentation is confusing, saying that connections start on 5554 but then showing the name of the emulator as -tcp-5555.
I wanted you to know that you are not alone in being confused about this.
I'm just glad I've made it work, finally.