Hi Wogga,
What linux distribution do you use? (mandrake, fedora, slackware or what?)
The message you've got is from a console terminal.
In order to start xterm it is mandatory to run X first. This is normaly done with startx command from console.
Note: Mandrake, by default, will not allow you to get X if root :-(
Pls don't ask me why, I'm just a newbie slackware user ;-)
There are 6 virtual terminals where you can login as different users. One can switch between these terminals from console by pressing Alt-F1, Alt-F2 ... and so on till Alt-F6.
By pressing Alt-F7 you get the first X window display (if one is already active!), Alt-F8 the second.
If you are within a windows session, you can switch back to console by pressing Ctrl-Alt-F1, or 2,3...
Now, you first login on tty1, virtual terminal 1, and get user@localhost tigger. Press startx and you're on x.
I presume that your system boots directly to X.
Switch to the terminal no.2 (Ctrl-Alt-F2), login as root and type:
type exactly as above, with blank space before and after --
You'll be on the second X session. Switch back to the first one by pressing Ctrl-Alt-F7 and again back with Ctrl-Alt-F8
Next: please read some linux docs and tutorials... :-)
Good luck!
Dan