X-Win32 has implemented the Xinerama extension starting in version 2010. Older Unix systems do not have this extension implemented and the desktop may fail when logging in to your remote host.
If after logging in to your host from an XDMCP session you automatically go to a gray screen you may be getting an Xinerama error.
To resolve your issue, please Disable the Xinerama Extension from the Single Window Mode options in the Window Tab of X-Config. Press Apply and restart X-Win32
There was also a bug which would cause a server reset on machines running kdm.
This issue has been fixed in 2010 build 1127. Please upgrade to the latest version of X-Win32 from http://www.starnet.com/support/upgrade.php