I'll answer my own question...
After some research on this forum I did:

<ctl><alt>1 to switch to vt1
telinit 2 to switch to runlevel 2
X -broadcast to start X and request xdmcp responses from the server

following this the RH login screen appeared and X ran very well with no perceptable loss in performance from running from the console of the RH machine. Much faster than Xmanager on Windows.

Killing the X session was clunky - quitting the session from th RH system put me back to the login screen, to kill the X session I had to <ctl><alt>1 to the vt1 again and use <ctl>c to kill the session. Not very tidy.

Why can't I have an xterminal session running on the Knoppix machine as well as the kde desktop?

Also, I tried from a Knoppix terminal:

telnet myRHserver
login blah blah....

...then in the telnet session
export DISPLAY=ipaddrofknoppixmachine:0.0
xterm

An xterm screen from the RHbox should then appear on my knoppix box.
It does when I use Xmanager or Exceed on a windows machine.

What I get is .....

Xlib: connection to "ipaddrofknoppixmachine:0.0" refused by server
Xlib: no protocol specified

term Xt error: Can't open display: ipaddrofknoppixmachine:0.0


How do I enable an incoming xterminal session? nb this is a CDROM system.

Doug