Short Answer: I had to set gstreamer properties to use X Window System (No
XV) as the plugin for Default Video Output.  This may be another effect of
the Intel Video drivers Jaunty seems to have trouble with.

Long Version:
============
I had decided the X-Windows call failure was probably associated with the
opening of the sub-window to display the picture from the web cam based on
the GUI that did appear and the timing.  I was going to go get the source
code and maybe try yo find it and maybe even do the compile-debug cycle as
it seems a lot of folks have this or a similar problem.  In the process I
found:

http://live.gnome.org/Cheese/FAQ

Since cheese worked on ubuntu 8.10 with the Asus eeePC 1000 but had slow and
choppy video like described in the #1 question I thought to look into that
answer.  Running gstreamer-properties from the command line brought up the
Multimedia Systems Selector GUI mentioned in question #2.  Clicking the Test
button on the Default Output section of the Video tab, which had been set to
Autodetect, caused the GUI to disappear and control returned to the terminal
AND display in the terminal virtually the same error message I got from
using strace on cheese.

From there it was a simple matter to determine that AutoDetect was using the
"X Window System (X11/XShm/Xv)" value and it was failing.  Once I changed it
to use "X Window System (No Xv)", cheese began working again albeit with
slow and choppy video.  This may be another effect of the Intel Video
drivers Jaunty seems to have trouble with.

-- 
Dazed_75 a.k.a. Larry

The spirit of resistance to government is so valuable on certain occasions,
that I wish it always to be kept alive.
 - Thomas Jefferson