Guys, I don't understand why my reasoning would be faulty.
To make it very simple to you:
1) I downloaded the current iso for slitaz 3.0 stable.
2) Burned it to CDROM, as is.
3) When booting, and after exiting Xwindows, trying to restart Xwindows I get the errors mentioned above, when following the procedure mentioned above.
I think it is very straightforward and there is no faulty thinking involved here, just facts.
Trixar, as to your statement that I am assuming wrong when I say I have two different iso's.....I am telling you the truth, it's not assumption, but facts. I tried to come up with an iso checksum for the old iso to show you, but I only have the already burnt CD, not the iso. It has a checksum file with checksums of all the stuff on the CD, but not of the iso itself. This is the older iso which came with the .xsession file in /home/tux. If you know of a way to derive the iso's checksum from a burnt CD, please let me know and I will post it. In the meantime I'll post below the checksum file found on this CD, maybe it will be of help in identifying the iso's checksum, so that you will know exactly what I am talking about:
7d2a57627ef70adf1324739387059868 boot/vmlinuz-2.6.30.6-slitaz
df4522b4aade234b74d7827831cdbe58 boot/grub/example-menu.lst
69976741f777a6fb9e282da2b4c6b2c7 boot/rootfs.gz
3c8a0c5111fef9fd9e90ac921e8e327c boot/isolinux/fr.kbd
38405edb84e31dee769230d081ca7732 boot/isolinux/ifmem.c32
c7964057a948365f5cfb49c952c4aeea boot/isolinux/help.txt
0bb9ea953e54dd56025ebf4d293c1492 boot/isolinux/us.cfg
7ec434dafe56fbfbbd9f609a8e51adf1 boot/isolinux/isolinux.bin
c4732bb5511797e44b6198ed04eba45a boot/isolinux/en.kbd
3e850f812b57f524a3cf52b0959fe32b boot/isolinux/en.cfg
6045a9cf649a821bf5289b5e52c20229 boot/isolinux/de.cfg
6c4945fd7122c89bf3a65be1eb0a15b5 boot/isolinux/ru.cfg
a2b7cf1366d6b35066a0424c9558cc06 boot/isolinux/ru.kbd
8e2697879614512c059f4f467ba0caf0 boot/isolinux/poweroff.com
b66c8487e0103be66280d1046612e7e1 boot/isolinux/splash.lss
2499f5ae8924daffbd85505ddbbd2f17 boot/isolinux/hu.kbd
969029d075af9c6fa48601358603fa0b boot/isolinux/ca.kbd
1ebcf7c9072e3cfb832b3a84e62d93f9 boot/isolinux/br.cfg
113bbeb0cd1d2b14db013de5a9b7fb9a boot/isolinux/es.kbd
7bfb2f1ff980de8ba0b66ccb96f4d70e boot/isolinux/display.txt
5c058e6607591a20d6c9d99b51a3b3e4 boot/isolinux/de_CH.cfg
85de1ba17d691f218a81f9ebbab8ecc9 boot/isolinux/enopts.txt
58cacedac9659777534ed5c8dd6f2be6 boot/isolinux/de_CH.kbd
14e3d138bdaa847f9ecb0f276803015b boot/isolinux/options.txt
4c27bfdfa950ea1529a8381ba55a3695 boot/isolinux/isolinux.cfg
58a9b06849620d07c19eeebf28ac59af boot/isolinux/hu.cfg
66e6e3d19136423c0a66b1708269ee43 boot/isolinux/es.cfg
c1b9d6dc81f69b2b905ee2ad4033328e boot/isolinux/de.kbd
2ba424ca6ff85d7185c7eba66ff307b9 boot/isolinux/it.kbd
93d3998853b3563bb09e6ec10f6a7f19 boot/isolinux/fi.kbd
9ac666a92b7e4bdaa13491f4199513b9 boot/isolinux/be.kbd
e7d7816a17e18b75b22a65d049ccec4c boot/isolinux/be.cfg
fdd033d8a3afeaba05f6350739c6086e boot/isolinux/common.cfg
292e5b1b7da75026fb99a260b342a237 boot/isolinux/reboot.c32
db34226bf9ac6f1f64abb333d471d9d8 boot/isolinux/ca.cfg
10f684b00785b093411a4f1a83af2a6c boot/isolinux/jp.kbd
99ee137e600923903792ca8a512e53f5 boot/isolinux/isolinux.msg
723693a6896757559c96a95e50e6a94e boot/isolinux/fi.cfg
a67f97b4b8b23adf21d4aa068976b82c boot/isolinux/fr_CH.cfg
e0583781034a89344786c0afd3a9987b boot/isolinux/it.cfg
4d7599cb46f6dd691bdacd36197a02a3 boot/isolinux/fr_CH.kbd
9c3eb2869d0e16d5044bc166c70b0e66 boot/isolinux/enhelp.txt
d933fd4d8d1aa139e4327e62611a3e4b boot/isolinux/fr.cfg
e2c865db4162bed963bfaa9ef6ac18f0 boot/isolinux/us.kbd
7e7b79486db55c3a41e4d2be5055d681 boot/isolinux/pt.kbd
95d4076bbcb359a06e44b15030da9424 boot/isolinux/br.kbd
7d499ea63a3e6036652f24836d8b2c09 boot/isolinux/jp.cfg
63c564e204b7ea4c96e0d8aeb9a9ff07 boot/isolinux/pt.cfg
7d2a57627ef70adf1324739387059868 boot/bzImage
2ecfce30fc54f0c83c66db4fbe1dd616 boot/gpxe
7b2e71f249953e0d82cb6d08f64cb235 images/header.png
f696018bce9be2bdf9f93f910eeba926 index.html
d1fb41c783bddb6d2107ea9453c387f9 README
4a57d4663e381c47e869e12b236c395e style.css
I'm going to follow michaelbischof's advice and create a new user to see if that works....