b-man - You can remove step 4 entirely.. Twice now I have left the default gdm init.d script and it runs fine - we made changes in there to try and fix the X touchscreen; which we ended up fixing in the conf file instead.. so no changes need to be made to /etc/init.d/gdm...

Also.. check your installation... /etc/gdm/gdm.conf exists; but is mostly empty and referrs to /usr/share/gdm/defaults.conf. That is where you should make the server-Standard changes to get X to work and Autologin setup correctly.