You need to wire up three wires otherwise the phones won't ring (unless they are really old type and see note below) The incoming line should be connected to terminal 5 (A leg) amd terminal 2 (B leg) on a master socket. The outgoing wires to extensions with the "new" type plugs should go 2 to 2, 3 to 3 and 5 to 5. You should only have one master socket, if you want to use the other masters as extensions, simply clip out the capacitor (across 2&3), resistor (across 3&5) and surge arrester (across 2&5)
Note: with all your sockets as master sockets, your phones will ring but you are putting a high capacitance across 2&3 and low resistance across 3&5 which could cause problems with your line.
See
http://www.wppltd.demon.co.uk/WPP/Wi...telephone.html for a pictorial display