Versions of software involved:

Debian Version: Woody
Kernel: 2.4.18-bf2.4
OpenSSH: 3.4p1

When doing a remote session and after exporting the DISPLAY variable I am unable to run X programs.

Returned error message: xterm Xt error: Can't open display: xxx.xxx.xxx.xxx:0.0

The remote machine is listed in the xhost access control list. hosts.allow is empty. This is probably not a firewall problem since the problem also occurs on the LAN. In /etc/ssh/ssh_config an entry
"ForwardX11 yes" has been added.

Can anyone perhaps indicate what the problem might be.

Okay - I got someone outside this group that solved the problem for me. For those interested, start the ssh session as "ssh -X user@machinex.bbb.xxx " . That solves the problem.