After upgrading a Red Hat 5.1 system to Red Hat 6.0 using the upgrade procedure as outlined in the manual, xterm and xterm-color will not start when chosen from the gnome menu. They leave a core file after failing to start. Running the gnome terminal does bring up a window but there is no shell running in it and the window stays blank.
I found the fix for this problem at http://linux.netnerve.com/fix/ptys.html
make sure you have the devpts filesystem mounted.