I've got things working quite well now. For instance, I can start Debian apps from a menu icon in OS2008.

I have made a wiki entry. Feel free to fix it as you see fit. But don't change anything until you've tested your changes!

@dasickis:

I'm familiar with forwarding X. But that's not what I'm doing here.

@benson:

• I don't think this is an SSH issue. It works when I do it in two steps, why not in one?
• Thanks for the $* tip. I've changed the wiki.
• I don't do the mounting, binding and copying stuff on startup because all the howtos that I've read never suggest that route. And when nobody does something, there's a reason. I admit ignorance, however, as to what that reason is. It works, so I'm not going to mess with it.

I've also realized that running chroot apps as root is problematic, so I've changed hilda to use su user -c instead of exec.