vncserver startup error

[mark.valery@gcdchips.com]

I've searched the mail archives and could not find a solution to
my problem that works:

1. I compiled 3.3.4 and installed without any errors.
2. I've gone with the default vncserver perl scripts and
with additional xauth commands:
system("xauth -f $xauthorityFile add $host:$displayNumber . $cookie");
system("xauth -f $xauthorityFile add $host/unix:$displayNumber . $cookie");
 or
system("xauth -f $xauthorityFile add $host:$displayNumber . $cookie");
system("xauth -f $xauthorityFile add $host:$displayNumber\.0 . $cookie");
system("xauth -f $xauthorityFile add $my_fqdn:$displayNumber . $cookie");
system("xauth -f $xauthorityFile add $host/unix:$displayNumber . $cookie");
same error with each.
3. I've tried multiple options to the vncserver command:
:2 -ac -localhost -nolisten local -cc 3 -depth 8
I've tried different combinations of the above.
4. My xstartup is:
#!/bin/sh
xhost +
xterm -geometry 80x24+10+10 -ls -title "$VNCDESKTOP Desktop" &
twm &


No matter what I do, I end up with the same errors in my log file:
01/11/02 18:09:20 Xvnc version 3.3.4 - built Nov  1 2002 12:09:29
01/11/02 18:09:20 Copyright (C) 2002 RealVNC Ltd.
01/11/02 18:09:20 Copyright (C) 1994-2000 AT&T Laboratories Cambridge.
01/11/02 18:09:20 All Rights Reserved.
01/11/02 18:09:20 See http://www.realvnc.com for information on VNC
01/11/02 18:09:20 Desktop name 'X' (morse:2)
01/11/02 18:09:20 Protocol version supported 3.3
01/11/02 18:09:20 Listening for VNC connections on TCP port 5902
01/11/02 18:09:20 Listening for HTTP connections on TCP port 5802
01/11/02 18:09:20   URL http://morse:5802
xhost:  unable to open display ":2"
Error: Can't open display: :2
twm:  unable to open display ":2"

Any suggestions are welcomed.
Thanks
Mark