I have now successfully created an xterm client window within the knoppix desktop:

su
xhost +192.168.0.1
exit
telnet -l user 192.168.0.1
password
export DISPLAY=192.168.0.12:0.0
xterm

the xterm screen will be displayed on the client machine.

I have changed a truckload of other settings on the system in getting to this point, but I do not think they have any bearing on this exercise. I will post a correction if necessary.

Incidentally in the new xterm screen repeatedly entering 'xterm &' will create new windows.

doug