ssh X-forwarding problem

[Carl Alexander]

I have a newly installed 6.06.1 LTS server on which I've installed
the opednssh-server, xorg, and xterm packages.  I've edited 
/etc/ssh/sshd_config to allow X forwarding:

    xela at ubu:~$ grep -i x1 /etc/ssh/sshd_config 
    X11Forwarding yes
    X11DisplayOffset 10
    xela at ubu:~$ 

But when I ssh into it I get:

    xela at ubu:~$ xterm &
    [1] 18593
    xterm Xt error: Can't open display: 
    xterm:  DISPLAY is not set
    [1]+  Exit 1                  xterm

I get this regardless of whether I use ssh -X, -Y, or no command-line
flags at all.  I regularly use X-forwarding on other hosts from the
machine I'm sitting at, so I'm confident it's not a client-side 
issue.  Any clues would be greatly appreciated.

---Alex