Very simple, I logged in as 'davem' and tried to run X which failed because of problem #4. So I ran "su" to become root and start it by hand. It printed out "starting xfs: " message but the colored "OK" on the right side never happened, in fact it just printed a newline and gave me my root shell prompt back. Logging in on another VC freshly as root allowed it to work.
fixed in XFree86-3.3.3.1-37 and later, initscripts-4.01 and greater.