Hmm sadly I can't say what the reason is - and I only have experience with the n810.
The first evil line here is the
Error opening terminal: xterm

The strange thing is that the xterm application is not called xterm but osso-xterm...
Unfortunately I can't say why it "wants" to open something called "xterm"... The "Error"s later are normal, so I guess it's all about the xterm-line.

Did you install ncurses-base? But I think you've got to have it installed for installing kismet...

Maybe some other n800 users could give some advice?

/EDIT seems to be curses related, when I searched the forum for the xterm-line I found some stuff which was also ncurses-related. Get the packages libncurses and ncurses-base...