Xterm Xt Error: Can't Open Display: %s

I have seen similar posts about not being able to open an xterm window, but for some reason nothing is working for me. I have a 64-bit machine running of SuSE 9.1. This computer is not used as a desktop but rather one machine in a cluster that is used only for running jobs, mostly with abaqus. I tried to install a newer version of abaqus on the machine and it can only be installed using a GUI. When it failed, I discovered that on all 5 machines in our cluster I cannot open an xterm window, nor can I run xclock. Most of the other threads I have seen have been for remote connections. But this happens to me when I am connected locally as well.
Currently I get the following:

quad2 /# echo $DISPLAY
:0.0
quad2 /# which xterm
/usr/bin/xterm
quad2 /# echo $PATH
/opt/intel_fce_80/bin:/sbin:/usr/sbin:/usr/local/sbin:/root/bin:/usr/local/bin:/usr/bin:/usr/X11R6/bin:/bin:
/usr/games:/opt/gnome/bin:/opt/kde3/bin:/usr/lib/java/jre/bin:/usr/local/g95/bin/:/usr/local/mpich2/bin:
/usr/local/link-checker:/usr/local/mpich2/bin:/usr/local/link-checker:.:/usr/local/bin/abaqus/Commands/:
/usr/lib/java/jre/bin
quad2 /# xterm &
[1] 15014
quad2 /# Warning: This program is an suid-root program or is being run by the root user.
The full text of the error or warning message cannot be safely formatted
in this environment. You may get a more descriptive message by running the
program as a non-root user or by removing the suid bit on the executable.
xterm Xt error: Can't open display: %s

[1] Exit 1 xterm
quad2 /#

I have just joined a company in which everyone who did anything with the Linux systems has left and everyone else remaining doesn't know Linux. Attempting to install the software was the first thing I have done on this system with the exception of adding users and transferring files from a Windows machine using SFTP. Any help would be appreciated!