I'm using kdm, but you had the right file all along. The problem was that the session manager was being invoked and was choosing what to run at startup. So I commented out the session manager and added my stuff to the initrc file and now it's working great. You should see how fast it starts up.

Yep, rox takes over the background setting, so I dragged and dropped like you did. I just figured since I was using xfce4 that I'd go with their background. I must say, I'm really pleased with this setup. Thanks for helping me get it working.