> The output will be something like:
> xterm Xt error: Can't open display: 10.0.0.126:0
> 10.0.0.126:0

This is easy: Your X client (i.e. the application, like xterm for example) does not have permissions to open the screen on the X server.

On the X server, do a "xhost +" (no quotes)

This will allow permissions for ANY client to open the display. Still, the DISPLAY variable has to be correctly set like this on the X client side:

export DISPLAY=192.168.192.1:0.0

(As a side not, when talking X windows....everything seems "reversed" (aparently), the server is the display and the client are the actual applications, like xterm, xeyes, and others.)

Hope this helps.