I've encountered a couple of problems with vnc startup:

1) More common: when starting with 'vnc vncpassword=password', messages like these appear.

12:13:37 The VNC Server is now running.
vncconfig: unable to open display ":1"
vncconfig: unable to open display ":1"
vncconfig: unable to open display ":1"
vncconfig: unable to open display ":1"


2) Less common: While starting VNC from the text dialog (after X fails and falls back to text mode), I choose to use a password. I type the password quickly and hit OK, and anaconda exits abnormally with the following traceback:

11:24:31 The VNC Server is now running.
Traceback (most recent call last):
  File "/usr/bin/anaconda", line 870, in <module>
    runVNC()
  File "/usr/bin/anaconda", line 254, in runVNC
    vncS.startServer()

I suspect this code chunk from startServer(): 

        # Lets give the xvnc time to initialize
        time.sleep(1)

        # Make sure it hasn't blown up
        if xvncp.poll() != None:
            sys.exit(1)
        ..
        self.setVNCPassword()

In the common case, I'm not positive that time.sleep(1) is enough to ensure that xvnc is actually ready for vncconfig to connect to it.

As for the latter case, I don't know why xvncp.poll() would return non-None without there being any log messages etc. Maybe poll() isn't working as expected? It would be helpful if an error was raised or a message logged, rather then immediately exiting.