> Can anyone tell me if it is possible to pass through the display
> variable to this new xterm

These lines should be placed in the .login or .profile:

TTTY=`tty`

if [ "$TTTY" != "/dev/console" ]
then
        DISP=`who am i | awk '{print $6}' | sed 's/(//g' | sed 's/)//g'`
        DISPLAY=$DISP:0.0
        export DISPLAY
else
        DISPLAY="127.0.0.1:0.0"
        export DISPLAY
fi

#!/bin/sh
tty=`tty | sed 's/.*pts/pts/'`
disp=`who -l | grep $tty | awk '{ print $NF }' | sed 's/[\(\)]//g'`

echo $disp