hanging on logout, can't background client

[Markus Friedl]

why don't you start the xterm with
	$ ssh -f host xterm

see ssh(1)

     -f      Requests ssh to go to background just before command execution.
             This is useful if ssh is going to ask for passwords or passphras-
             es, but the user wants it in the background.  This implies -n.
             The recommended way to start X11 programs at a remote site is
             with something like ssh -f host xterm.