You can easily telnet from your NC with nothing more installed. Next we have to set up the X server. So any machine that can run xdm can be used as X Server. Just make sure XDM is started. Everything on the server side should be setup now.
Lets try the NC side.
Then boot it up. It will boot after checking its Memory, VGA etc, in a screen IBM Network Station Setup Utility. Basically you can manage everything from this menu system. The main parts will be described here. Ethernet Standard Version 2 Resembles my setup.