I think it'll be difficult to do much with xterm. With konsole, and with openoffice.org, I did have some luck. For instance, I opened both openoffice.org, and konsole, and typed some stuff in openoffice. I then pressed F8, allowing for keyboard selection, and then pressed the arrow keys to select some of the text that I typed. I then copied this selection with Ctrl-C. Then, pressing Alt-Tab (or Alt-Shift-Tab), I selected konsole. I used konsole's paste keybinding (Shift-Insert) to paste the selected text from openoffice.org into konsole. So, using only a keyboard, I was able to select some specifically chosen text from a program (OOo), and paste it into a terminal (konsole).
The problem, though, is many programs don't have such key bindings associated with them. I don't think xterm has any capacity for pasting besides using the middle mouse button. And programs that can select text via a keyboard (other than select all, which is usally Ctrl-A) for copying are quite rare.
(later..) I found something else
. Using xclip (you'd need to install this program), you can copy and paste to different xterms. For instance:
mark@debian:~$ echo Hello World | xclip -i
mark@debian:~$ xclip -o
This works whether it is with the same xterm, or if it is between two different xterms.
It can be done from xterm to other programs, too, with the following:
echo Hello World | xclip -i -selection clipboard
This will copy the typed phrase ("Hello World") onto the clipboard. Then, you can paste this phase into any text program, such as gedit, or openoffice.org, via Ctrl-V. This doesn't work between different xterms, though (it ends up copying the entire line, for some reason).
Note: the keybindings I described above were while using fluxbox. They're reasonably common keybindings (IE, Ctrl-V for paste), but these may be different for whatever tiling window manager you're using.