I can't start an xterm with Xvesa

Hi all... this list has been a lot of help to me, and I'm hoping I could get 
specific help with one of my problems.

I am trying to build a small linux distro on a bootable usb key.  I have a 
kernel, root filesystem with basic utilities, and Xvesa, and I can boot okay 
to a bash prompt.  When I start Xvesa (Ie. "Xvesa :1") it starts up fine.  
However, when I try to execute "Xvesa :1 & xterm -display :1" the server 
starts, but then the screen goes black and everything freezes.  I know I 
have all the required xterm libraries.  I also put xcalc on the key and 
tried "Xvesa :1 & xcalc -display :1" -- this works, albeit only the the 
input area of the calculator can be seen.  I'm concerned mainly with xterm, 
as I want to be able to launch my programs from there.   Below I have 
included my /dev and /lib directories.  On the computer I'm building this 
on, if I boot into single mode and start Xvesa with xterm, it works okay... 
so maybe I'm just missing something to glue it all together? I thank all who 
read this, and hope any answer can help myself and others.

[root@localhost usbkey]# ls -lat dev
total 30
drwxr-xr-x  11 root root    1024 Apr  8  2005 ..
prw-------   1 root root       0 Apr  7  2005 initctl
drwxr-xr-x   3 root root    1024 Apr  7 03:10 .
crw-r--r--   1 root root 226,  0 Apr  7 03:10 radeon
crw-r--r--   1 root root   1, 11 Apr  7 03:10 kmsg
crw-r--r--   1 root root   1,  8 Apr  7 03:10 random
crw-r--r--   1 root root  10, 63 Apr  7 03:10 device-mapper
crw-r--r--   1 root root  36, 13 Apr  7 03:09 ip6_fw
crw-r--r--   1 root root  13, 64 Apr  7 03:09 event0
crw-r--r--   1 root root   1, 11 Apr  7 03:07 kmem
crw-r--r--   1 root root   5,  0 Apr  7 02:49 tty
crw-r--r--   1 root root   4,  4 Apr  7 02:48 tty4
crw-r--r--   1 root root   4,  3 Apr  7 02:48 tty3
crw-r--r--   1 root root  10,  1 Apr  7 02:31 psaux
crw-r--r--   1 root root   6,  0 Apr  7 02:29 lp0
brw-r--r--   1 root root   7,  0 Apr  7 02:29 loop0
drwxr-xr-x   2 root root    1024 Apr  7 02:27 pts
lrwxrwxrwx   1 root root       4 Apr  7 02:26 ramdisk -> ram0
drwxr-xr-x   2 root root    1024 Apr  7 02:19 input
crw-r--r--   1 root root  13, 32 Apr  7 02:16 mouse0
brw-r--r--   1 root root   1,  0 Apr  7 00:42 ram0
crw-r--r--   1 root root   1,  5 Apr  7 00:36 zero
crw-r--r--   1 root root   1,  3 Apr  7 00:33 null
crw-r--r--   1 root root   1,  1 Apr  7 00:32 mem
crw-r--r--   1 root root   4,  2 Apr  7 00:32 tty2
crw-r--r--   1 root root   4,  1 Apr  7 00:32 tty1
crw--w--w-   1 root root   4,  0 Apr  6 23:51 tty0
crw--w--w-   1 root root   5,  1 Apr  6 23:51 console

[root@localhost usbkey]# ls -lt lib/
total 27699
-rwxr-xr-x  1 root root   17632 Apr  7 05:46 libXxf86vm.so.1
-rwxr-xr-x  1 root root   29636 Apr  7 05:46 libXrender.so.1
-rwxr-xr-x  1 root root  487456 Apr  7 05:46 libGLU.so.1
-rwxr-xr-x  1 root root  512716 Apr  7 05:46 libGL.so.1
-rwxr-xr-x  1 root root   71724 Apr  7 05:46 libbz2.so.1
-rwxr-xr-x  1 root root   63528 Apr  7 05:46 libz.so.1
-rwxr-xr-x  1 root root  311056 Apr  7 05:46 libtiff.so.3
-rwxr-xr-x  1 root root  144044 Apr  7 05:45 libpng12.so.0
-rwxr-xr-x  1 root root  119352 Apr  7 05:45 libjpeg.so.62
-rwxr-xr-x  1 root root   11080 Apr  7 05:45 libXrandr.so.2
-rwxr-xr-x  1 root root   32680 Apr  7 05:45 libXcursor.so.1
-rwxr-xr-x  1 root root   30856 Apr  7 05:45 libgcc_s.so.1
-rwxr-xr-x  1 root root  215248 Apr  7 05:45 libm.so.6
-rwxr-xr-x  1 root root  811744 Apr  7 05:44 libstdc++.so.6
-rwxr-xr-x  1 root root   53508 Apr  7 05:44 libXext.so.6
-rw-r--r--  1 root root 2000634 Apr  7 03:22 bzImage
-rwxr-xr-x  1 root root  108332 Apr  7 03:22 ld-linux.so.2
-rw-r--r--  1 root root   23572 Apr  7 03:22 libacl.so.1
-rw-r--r--  1 root root   26319 Apr  7 03:22 libattr.so.1
-rwxr-xr-x  1 root root   16908 Apr  7 03:22 libdl.so.2
-rwxr-xr-x  1 root root  127592 Apr  7 03:22 libexpat.so.0
-rwxr-xr-x  1 root root  152756 Apr  7 03:22 libfontconfig.so.1
-rwxr-xr-x  1 root root  424068 Apr  7 03:22 libfreetype.so.6
-rwxr-xr-x  1 root root   86456 Apr  7 03:22 libICE.so.6
-rwxr-xr-x  1 root root   56288 Apr  7 03:22 libselinux.so.1
-rwxr-xr-x  1 root root   53736 Apr  7 03:22 libsepol.so.1
-rwxr-xr-x  1 root root   32688 Apr  7 03:22 libSM.so.6
-rwxr-xr-x  1 root root   12592 Apr  7 03:22 libtermcap.so.2
-rw-r--r--  1 root root   10737 Apr  7 03:22 libutempter.so.0
-rwxr-xr-x  1 root root  814588 Apr  7 03:22 libX11.so.6
-rwxr-xr-x  1 root root  364828 Apr  7 03:22 libXaw.so.7
-rwxr-xr-x  1 root root   70364 Apr  7 03:22 libXft.so.2
-rwxr-xr-x  1 root root   86932 Apr  7 03:22 libXmu.so.6
-rwxr-xr-x  1 root root   58320 Apr  7 03:22 libXpm.so.4
-rwxr-xr-x  1 root root  326524 Apr  7 03:22 libXt.so.6
drwxr-xr-x  2 root root    1024 Apr  7 03:22 dev
drwxr-xr-x  2 root root    1024 Apr  7 03:22 optimized
-rwxr-xr-x  1 root root 1504728 Apr  7 03:18 libc.so.6
-rwxr-xr-x  1 root root  106212 Apr  7 03:18 libpthread.so.0
-rwxr-xr-x  1 root root  682912 Apr  7 03:18 libtcl8.4.so
-rwxr-xr-x  1 root root  864660 Apr  7 03:18 libtk8.4.so
drwxr-xr-x  8 root root    1024 Apr  7 03:18 tcl8.4
drwxr-xr-x  2 root root    1024 Apr  7 03:18 tls

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