To setup X forwarding to run single applications remotely, not much work is necessary. On the X server (the display), ensure that connections are allowed from localhost. Then configure the SSH client to allow X11 forwarding through localhost:0. On the remote host (the machine you are logging in to), you should immediately be able to run any X application like xterm, xeyes, etc. If you have problems, check the DISPLAY environment variable; it should be set and the value should be the X server's network address and some screen offset.
XDMCP is how you obtain an entire login session from xdm to be spawned on a different X server. First, on the remote host (the one running xdm), edit Xaccess and ensure that your workstation's network address is permitted; restart xdm if necessary. Then, on the workstation, start the X server and create a new XDMCP session. (For X.Org, the command is X -query ) You should see a login window appear. Log in as you would at the console.