Problem solved !!!, Thanks to van Putte, Wolfhagen, Habacker et al. that had already discussed the matter under a different title. Sorry for the inconvenience.
A hint for those who, like me, do not know much about this stuff check for error beyond X and into xterm behaviour: 1- Step to diagnostic The new version of cygwin 1.3.11 (try cygcheck -s | grep "cygwin" to see the cygwin version) there is some change in the implementation of the security (that among other thing do not permit you to open xterm sessions). You must adjust your system consequently by defining a "real" user and not some kind of Administrator (before I was Administrateur and now daniel (my real login name)). To diagnose my problem I added the "-hold" option to the command xterm (xterm -hold &)in my startup scripts (startxwin.sh and .xinitrc). That's when I realised that it was a Permission problem and not an X problem. 2- X and xterm related problems and cygwin security To redefine users see the thread this month : -> xterm fails to start with "setuid failed: Permission denied" and the mkpasswd command. Basically what it does it to make a new password file with users and network information. Cygwin uses it for the login. Attention!!! Watch for big network, the file could end up very long. Here is what I did : mkpasswd -l > /etc/passwd mkpasswd -d | grep "daniel" >> /etc/passwd (I knew my login name to be daniel) And voila, I am now daniel@mymachine and no longuer Administrateur@mymachine. And the best of it xterm now works (after some tweeking, read on). 3- Tweeking scripts for optimum functionning When I finally got my X working (with the steps outlined above), I had to add "-e /usr/bin/bash" to the xterm command in my startup scripts (xterm -e /usr/bin/bash &) because it could not find bash in /bin/bash (thanks to -hold option for the hint). I also added an alias to my .bashrc "alias xterm='xterm -e /usr/bin/bash'. Thanks again all, Hope this will be useful and good luck to others DCT
