Jerry, read the doc here

http://www.slitaz.org/en/doc/handbook/system-admin.html

If it still fails, try `useradd' on which `adduser' is based.

i think that it depends on slim, the login manager.
slim executes the .xinitrc in the home directory of the user who is logging in.
check that you have a valid .xinitrc in the home directory of the user you have created.
if you don't have it you can copy the one in tux's home.

Hello Jerry,

have a look here: http://forum.slitaz.org/index.php/discussion/comment/2753/

Regards,
LuX.