k12ltsp strange mouse/keyboard behavior

[Matt Alexander]

I setup a k12ltsp server (http://k12ltsp.org) at work and I plan on using
it for our employees in our call center (they have very limited software
needs so this will be a good testing ground).  I've been testing things
and I keep encountering random problems with the mouse/keyboard within
KDE.  Sometimes I can no longer click on anything.  The only way to get
out is to Ctrl-Alt-Backspace to kill the X session.  This seems to happen
most often when clicking the Logout button on the taskbar, I can't click
anything else or use any keyboard keys (except Ctrl-Alt-Backspace) to
complete the logout process.

The hardware is fairly simple:  Serial mouse, P-133MHz, 64MB RAM, 1MB
Video card.

Here's what I get in .xsession-errors after logging in:

XIM DEBUG: xset:  bad font path element (#37), possible causes are:
Directory does not exist or has wrong permissions
Directory missing fonts.dir
Incorrect font server address or syntax
xset:  bad font path element (#37), possible causes are:
Directory does not exist or has wrong permissions
Directory missing fonts.dir
Incorrect font server address or syntax
DCOPServer up and running.
DCOP Cleaning up dead connections.
Mutex destroy failure: Device or resource busy
Mutex destroy failure: Device or resource busy
Mutex destroy failure: Device or resource busy
mcop warning: user defined signal handler found for SIG_PIPE, overriding
QWidget::setMinimumSize: The smallest allowed size is (0,0)
QWidget::setMaximumSize: (unnamed/DigitalClock) Negative sizes (2,-4) are not possible
QWidget::setMinimumSize: The smallest allowed size is (0,0)
QWidget::setMaximumSize: (unnamed/QLabel) Negative sizes (49,-4) are not possible
QWidget::setMinimumSize: The smallest allowed size is (0,0)
QWidget::setMaximumSize: (unnamed/DigitalClock) Negative sizes (2,-4) are not possible
QWidget::setMinimumSize: The smallest allowed size is (0,0)
QWidget::setMaximumSize: (unnamed/QLabel) Negative sizes (49,-4) are not possible
QObject::connect: No such slot
KWrited::block_in(const char*,int)
QObject::connect:  (sender name:   'unnamed')
QObject::connect:  (receiver name: 'unnamed')

I also have a shell script that I created an icon for our users to click
on.  Here's the contents of the script:

/usr/X11R6/bin/xterm -T Matt-Test -e /usr/bin/telnet 172.16.10.20 &

After clicking this icon, I get this message in .xsession-errors:

Invalid entry (missing '=') at /usr/local/bin/matt-test.sh:1

Any guesses as to what's going on?
Thanks,
~M