Here's how I install VNC on RedHat 7.1, it works every time without fail. No exceptions.
1. Get the tarball and extract it into a directory (any directory).
2. Copy all of it into /usr/bin
3. Run vncserver (as root) from a command shell.
4. Supply and confirm the password.
5. Go to /root/.vnc/ and open xstartup using vi or whatever editor you prefer. Make it look just like this:
#!/bin/sh
gnome-session &
That's it, nothing else. Trust me.
6. Run vncserver again, this will start session 2 using the new parameters. You should hear the hard drive on the linux box chugging a bit as it loads Gnome.
7. Go to a client and open servername:2 (or serverIP:2 if you don't have DNS or WINS on the network).
If this doesn't work, you have something else WAY broken. I have done this dozens of times without fail. For additional troubleshooting help, see the .log file in the /root/.vnc directory (there is one from each running session).
One common problem is not having the server hostname setup properly. Make sure you have an entry for it in hosts.conf.
By the way, use webmin. It is really sweet, it makes all of this very easy.
If Telnet isn't running, you probably didn't install it (i.e. you specified "Workstation" in the setup), or you just need to tell it to start. Webmin makes this easy in servers/extended internet services, Change it to "service enabled" YES, save it, and apply the settings at the bottom of the page. It should work now.
Make sure the hostname is OK. Everything is difficult if it isn't.
Cheers,
Steve, former Linux newbie.