These packages were downloaded from ftp.kde.org, but the Packager: field of
rpm -qi gives the RedHat
bugzilla URL. So here goes...

kdebase of the newly released kde 2.0 have wrong paths in it. I did rpm -U
for all the packages from the site, and now kdm logs to syslog:

 Nov 15 10:51:29 aragorn kdm: process-id file /usr/etc/X11/xdm/kdm-pid
cannot be opened

I created the directory and kdm started running. But after logging in all I
get is an xterm; nothing else. All my earlier kde settings are not
recognised at all. The desktop is blank, no menus, nothing. If I exit from
the xterm, I am logged out.

The following lines are also logged:

Nov 15 10:52:10 aragorn kdm[976]: Cannot open server authorization file
/usr/etc/X11/xdm/authdir/A:0-kcVUK2
Nov 15 10:52:16 aragorn kdm[984]: can't execute "/usr/etc/X11/xdm/Xsetup"
(err 2)
Nov 15 10:52:25 aragorn              [985]: Session
"/usr/etc/X11/xdm/Xsession" execution failed (err 2)
Nov 15 10:55:29 aragorn kdm[1015]: can't execute "/usr/etc/X11/xdm/Xsetup"
(err 2)

These files are found in /etc/X11/xdm, and not in /usr/etc...

The version of kdebase is kdebase-2.0-3.