X gave this problem during testing:

Fatal server error:
xf86OpenConsole: Cannot open /dev/tty0 (No such file or directory)

Example:
thin-client up and logged in
Started a gnome-terminal. A terminal of the server appears.
Logged as root.
Launched xhost +
Get this answer:

unable to open display localhost:11.0

launching: /usr/bin/X -ac :1

we get:

Fatal Server Error
xf86OpenConsole: Cannot open /dev/tty0 (No such file or directory)