It doesn't work because the command is run within a gdm session.
It causes one of those two things :
1- The xterm is closed, as the script, and gdm just doesn't start
2- xterm makes X stays open while gdm is down, and gdm cannot start a new X
session.
One easy workaround is to start the command in screen.
** Summary changed:
- /etc/init.d/gdm restart fails to start gdm
+ /etc/init.d/gdm restart in X fails to start gdm
** Changed in: gdm (Ubuntu)
Status: Unconfirmed => Confirmed
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/etc/init.d/gdm restart in X fails to start gdm
https://launchpad.net/bugs/80339
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