gnome-terminal refuses to log in

[u07ih abdn ac uk]

When I run gnome-terminal I get the following error
[iain@tigermilk iain] gnome-terminal
Living environment not ok
Error unable to fork: Connection reset by peer

Also an error box appears saying
"There has been an error while trying to login
 The error was: Connection reset by peer"

I'm running gnome-libs V 1.0.53
and both gnome-core V 1.1.0 and 1.0.53 (October GNOME)

I have just upgraded to 2.3.24 but I'm using the same kernel options as when it
was working (2.3.21).

Anyone got any ideas?
iain