From my desktop, I launch a terminal window.

I connect to ServerA (SLES 9) which has gnome as DE.

ssh -X root@ServerA

I type:
# echo $DISPLAY
localhost:10.0

However, I connect in same way to Server B (SLES 9) which has no GUI

ssh -X root@ServerB

# echo $DISPLAY


Why is no display being set on Server B?
thanks!

-X tells SSH to forward the X11 connection, which basically says that any graphical stuff gets "forwarded" from the remote server, over the encrypted SSH link, to your local machine.
Hence, you can see it.

ssh -X probably plays around with the $DISPLAY variable and alike to make this happen.

If you don't have an X server running (like on serverB ie text mode), the -X will have no effect, since there is no X server to actually use the forwarded X connection.
Sounds logical, no?

Why ssh then doesn't change/set $DISPLAY in that case, is probably just a logical consequence of this.

However, I'm no ssh/X expert, so I can be wrong on this one.