Have you tried the Xvfb (putting xvfb.server script in /etc/init.d) idea from Sun?
I have the same problem with Tomcat when I try to use IDL-Java Export Bridge within my Servlet code. I think that the Bridge glue code tries to launch IDL VM (which is an XWindow application) and causes "Unable to open XWindows display" error.
My target system is CentOS, but the -Djava.awt.headless=true did not work on Mac OS X (development environment). So, I presume that it won't work on CentOS, either.
I haven't quite figured it out yet to see how Tomcat will start using the Xfvb with this xvfb.server script.