Thank you, thank you, thank you, gentlemen! Finally, I got this mess to work. I did as Doug suggested. I think that after all the mods I made on the clients and server hdds, I must have screwed-up xhost.

Steps that worked:
(1)Server: I installed my server with knoppix-installer as Debian, addusers, and made all the server modifications listed in the links above. I then ran xhost +eachclientip but I found that adding the ips to /etc/hosts on the server works best!

(2)Client: Then I have my clients boot the knoppix cd with the boot string: knoppix 2. Then my clients run X -broadcast (I did not need :1) or X -query 10.10.2.5. And all is finally as it should be in the Land of Linux!

Minor problems left to resolve:
(1)Client: What I need to do is have my knoppix-installer as knoppix clients boot up to runlevel 2 so I don't need to burn so many cds....

(2)Server: The clients and the server resolution are both 800x600 only. If I boot the CD with the boot string: vga=normal screen=1024x768 xvrefresh=60 which used to work, I get a video modes on server and client mismatch error. I need to figure out how to get my i810 intel video onboard chip to give me its other mode, namely 1024x768 on the server. I got this res on the clients (when using ssh and fish instead of X -query) by booting a CD with the given boot string and copying the XF86Config-4 file from the ramdisk to my hdinstall. However, this only worked on knoppix-installer as knoppix, not knoppix-installer as debian. I had to knoppix-installer as debian my server to addusers and get the login window for my users....

Thanx,