On OSX 10.5, I use the Xquartz releases of X11 instead of the X11 releases from Apple. These are easy to install and have resolved some issues I've had. Currently using Xquart 2.3.1. They now allow copy from X11 to other apps using normal command-C command-V keystrokes (this may work in Apple releases as well, I'm not sure). Xquartz also now includes 3 button mouse emulation --- yeah! You still need a three button USB mouse to effectively work...
Get it here http://xquartz.macosforge.org/
The X security is handled differently in 10.5. The DISPLAY environment variable looks like this:
bash-3.2$ echo $DISPLAY
If you use
to connect to remote hosts and don't mess with the DISPLAY variable manually, things should just work.