1. X11 Forwarding must be enabled in the server's sshd_config(5) file. See the man page regarding the default, which is "no".
2. After X11 Forwarding is enabled, when you use ssh -X or -Y, the DISPLAY environment variable will be set for you.
Do not set the value yourself.
Code:
$ ssh jggimi
Last login: Tue Jul 24 23:00:04 2012 from netbook.jggimi.homeip.net
OpenBSD 5.2 (GENERIC) #61: Sat Jul 21 18:09:55 EDT 2012
$ echo $DISPLAY
DISPLAY: Undefined variable.
$ exit
.
.
.
$ ssh -X jggimi
Last login: Tue Jul 24 23:04:22 2012 from netbook.jggimi.homeip.net
OpenBSD 5.2 (GENERIC) #61: Sat Jul 21 18:09:55 EDT 2012
$ echo $DISPLAY
localhost:10.0