startx = gray screen

[bazz]

If you edit the lts.conf in Fiesty to include SCREEN_0x=startx and get a gray screen you need to add the server. Server being the LTSP server.
Example

If your lts.conf looks like
SCREEN_06=startx
SCREEN_07=shell

Add the server so it looks like this
SERVER=192.168.1.25
SCREEN_06=startx
SCREEN_07=shell

Now goto System -> Administration -> Login Window
Now click on "Remote"
On the drop down menu of styles select "Same as Local.

Note: If you are using Gusty, you will need to create/edit the lts.conf file in
/var/lib/tftpboot/ltsp/i386/lts.conf to look someting like this.

[default]

SERVER=192.168.1.25
SCREEN_06=startx
SCREEN_07=shell

If you do not have [default] as shown above this will not work.
You will also need to do the following:

System -> Administration -> Login Window
Click on "Remote"
On the drop down menu of styles select "Same as Local.