xterm in potato can't open ttys

[ferret@phonewave.net]

I just updated one of my systems to the newest potato as of Oct 31.

I'm running xterm 3.3.5-1, libc6 2.1.2-9, kernel 2.1.2 with kerneli and
ext2 compression patches. My kernel has /dev/pts support compiled and
working. As root I can run xterms and see them using pts/* with a 'w'
listing.

The problem is that normal users can't run xterm. Running xterm from an
rxvt window states 'no available ttys'.
What should I check before reporting a bug?

-- Ferret no baka