Thanks guys, with your suggestions, my X is finally up and running. However, I still have a final bit of problem.
When I logout of KDE, words go by my screen and the last few row of error messages are as following. At this point, the screen is flikering and dimmed (hardly can read the words on screen). But, when I re-startx, I can go in KDE fine.
kdeinit: Sending SIGHUP to children
warning: leaving MCOP Dispatcher and still 15 object reference alive.
warning: leaving MCOP Dispatcher and still 198 type alive
KLauncher: Exiting on Signal 1
waiting for X server to shut down
[promt]$kdeinit: Sending SIGTERM to children
I need to Ctrl-C to get to promt from last line Kdeinit:Exit.
Is this normal or there are tweak that I can perform in order to logout from KDE and go into normal text promp (level 3).
Thanks for any help.