.xinitrc or .Xsession is not being read!

["jdls" <jdls@apu.edu>]

help! I have removed gdm via update-rc.d with no errors 
now when I try tostart x (via X) I just get a mouse pointer and &
gray background (sort of like when you first installed X
w/o any window managers, etc) so I created my .xinitrc
file thinking that X would read that but still nothing. so
next I created an .Xsession file but still nothing... I am
using the latest xfree86-4 with helix-gnome.

My xinitrc file looks like this:

#!/bin/sh
exec gnome-panel &
exec sawfish &
exec gnome-session &
xterm
exit 0