I was thinking of the case where you wanted to have two X sessions run under
   two different UID's (and with two sets of X authority information).  Believe

So was I.  There's no reason you can't have one X server doing that.
In fact, the X server is always (currently) running as root anyway.
Remember, the server doesn't fork any subprocesses.

   Please, I didn't want to start a flame war!  This is getting nearly as bad as

I'm not engaging in a flame war.