It looks like
your initialization script is attempting to do xhost to
 add hosts to the list of hosts to be trusted by this X server.  See
 <http://www.netadmintools.com/html/xhost.man.html>   This is the "old
 school" way of doing security with X11; I think they now have a
 public/private key pair based way of doing things. 
    Yes, xauth.  Xauth has been around for about twenty years, though;
 it's just that it's sometimes not used because it's a pain in the butt.
   There's also a standardized method to use Kerberos 5 to authenticate
 clients to X servers, believe it or not! 
 
Let's also not forget about "ssh -X".
Peace...  Sridhar