Odd terminal problem

[alfredo]

I have Xwindows installed in OSX and this happens:

When I open a terminal in 11X I get this:

Checking for newer versions...
Error opening terminal: xterm.
Checking for newer versions...
Error opening terminal: xterm.
bash-2.05a$

I am pretty sure it is from distributed folding because it goes through the first line when launched in terminal.app.

How do I make it stop doing that? It also happens in OroborOSX.

thanks.