Hello, Ola!  The parts of the file after the 'exec' line are never
executed.  I should have pointed out that my working xstarted opts
for the 'regular desktop session' by uncommenting the 3 lines at the beginning.
Those lines are, by default, commented out and xstartup only executes an
xterm.  

The package version would probably look like this:

#!/bin/sh

# Insure clipboard transfer no matter what
vncconfig -iconic &

# Uncomment the following three lines for normal desktop:
# unset SESSION_MANAGER
# unset DBUS_SESSION_BUS_ADDRESS
# exec /etc/X11/xinit/xinitrc

[ -x /etc/vnc/xstartup ] && exec /etc/vnc/xstartup
[ -r $HOME/.Xresources ] && xrdb $HOME/.Xresources
xsetroot -solid grey
x-terminal-emulator -geometry 80x24+10+10 -ls -title "$VNCDESKTOP Desktop" &
x-window-manager &

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