I don't know why it does that. Personally I've never seen it actually work from anywhere other than a shell and exhibit the problem that you described. I don't know if it is just a RedHat thing or what. At any rate I haven't found it to be so much of a problem to try and figure it out since it works from the command line just fine.
Oh, and one more issue you may run into if you are using it under KDE. You may find that <CTRL><ATL><DEL> is a KDE key mapping and does not work in VNC if you leave the KDE key combo mapped. This will be a big problem if you are VNCing into an NT or Win2K box. Fortunately it is really easy to change the key mapping in KDE:
"Control Center"->"Look & Feel"->"Shortcuts"
On the right panel, find the "Action" that uses the key combo "Alt+Ctrl+Delete" and remap that action to a different key combination (or just don't assign any key combo to that action). Then you can use the CTRL+ALT+DEL combo in vncviewer.
[ July 30, 2002: Message edited by: VoidMain ]