With all respect to gdm, which I don't use or plan to use - where did xdm executable disappear from XFree86-4.0.1 package ? Mandrake 7.2 (beta) has it, so should I take it as an argument for switching to that distribution ?
Did you install XFree86-xdm-4.0.1-1.i386.rpm?
We've moved xdm to a separate package (XFree86-xdm) so people who don't need it don't need to have it around - most people are using either runlevel 3 or kdm or gdm these days. (And the fact that some distributions still include xdm as a must is an argument to switch away from them. ;) )