As per previous posts your system is either configured to boot into the terminal OR you don't have X11 installed.
To check your default run level run:
In your case it will most likely return 3
indicating your system is by default configured to boot into run level 3 which is the terminal.
To change the run level to boot into the desktop environment:
The contents of the inittab should be similar to:
# Default runlevel. The runlevels used by RHS are:
# 0 - halt (Do NOT set initdefault to this)
# 1 - Single user mode
# 2 - Multiuser, without NFS (The same as 3, if you do not have networking)
# 3 - Full multiuser mode
# 4 - unused
# 5 - X11
# 6 - reboot (Do NOT set initdefault to this)
Change the line id:3:initdefault:
Save the file and reboot. It would be a good idea to backup the inittab before you make the change.
If your system does not have X installed; you need to run:
# yum groupinstall "X Window System" "GNOME Desktop Environment"
This will install X and GNOME packages required. Note that you MUST
have a Red Hat subscription to be able to install the packages via yum.