[Tfug] xterm won't start

[Paul Scott]

Old laptop (i386) running Debian sid.  With 2.6.17 stock kernel xterm is 
fine. 

Installed 2.6.22 kernel and built module for USB wireless card.  
Starting xterm gives:

xterm: Error 32, errno 2: No such file or directory
Reason: get_pty: not enough ptys

Other term's don't work either.

Googling suggests "MAKEDEV pty" but it's not clear when to do that or 
what the Debian way is.  It also seems that reinstalling some package 
ought to fix it.

TIA for any ideas?