This is a nasty dependency, because xdm in turn depends on libXaw, and a number of other legacy X libraries. What is xdm being used for?
xdm isn't, but kdm shares common configuration files with xdm. That said, we've been meaning to get away from that sooner or later. May as well be sooner.
Well, this is something you introduced with the kde-redhat merge. The original official Fedora Core (i.e. up to FC6) packages weren't set up that way.
kde-settings-4.4-16.fc13 has been submitted as an update for Fedora 13. http://admin.fedoraproject.org/updates/kde-settings-4.4-16.fc13
kde-settings-4.4-16.fc13 has been pushed to the Fedora 13 testing repository. If problems still persist, please make note of it in this bug report. If you want to test the update, you can install it with su -c 'yum --enablerepo=updates-testing update kde-settings'. You can provide feedback for this update here: http://admin.fedoraproject.org/updates/kde-settings-4.4-16.fc13
kde-settings-4.4-16.fc13 has been pushed to the Fedora 13 stable repository. If problems still persist, please make note of it in this bug report.