>         yep. all that has indeed occurred to me. However, as I believe I
> mentioned in my first post; it seems that the X server binary needs to be
> SUID root in order for the .xserverrc file to work. (which it's not, in X4).
>         of course, it's quite possible I'm wrong.

How things are set up on a RH7 system:

cal at bigtime:~$ ls -l /usr/X11R6/bin/ |grep X
lrwxrwxrwx    1 root     root            8 Sep 28 13:56 X -> Xwrapper
-rwx--x--x    1 root     root      1538632 Aug 30 14:55 XFree86
-rwxr-xr-x    1 root     root        27499 Aug 30 14:54 Xmark
-rwxr-xr-x    1 root     root      2321432 Aug 30 14:55 Xprt
-rws--x--x    1 root     root         6024 Aug 30 14:55 Xwrapper

X is a symlink to Xwrapper which is suid. I think its a redhat
securityism though. I'm pretty sure it was with XFree 3.3.x...

How did you install X? Reinsall the package, or verify the package or
something if you want to be sure. Or just set XFree86 SUID. :P