AOLserver 4 requires privileged ports to be prebound on the command line. So, try:
# /usr/local/aolserver/bin/nsd -t /var/lib/aolserver/service0/etc/config.tcl -u service0 -g web -b 217.120.32.121:80
The AOLserver documentation hasn't been updated with this new info (AFAIK), but the
OpenACS docs have.