You can alias xterm to xterm -ut, but this won't work on a multi-user system. Here's what I did:

1. Create a directory called "corrupted" in /usr/X11/bin, and put the corrupt version of xterm in there.

2. Write a shell script called 'xterm'. Here's mine:

[root@snowdon X11]# pwd
/usr/bin/X11
[root@snowdon X11]# ls corrupt
xterm
[root@snowdon X11]# ls -l xterm
-rwxr-xr-x   1 root     root          173 Aug 29 09:58 xterm
[root@snowdon X11]# file xterm
xterm: Bourne shell script text
[root@snowdon X11]# cat xterm
#!/bin/sh
##
## Use the -ut flag to _not_ write to utmp, since this xterm
## seems to corrupt the utmp file.
##
## fadushin 28 Aug 1997
##
/usr/X11/bin/corrupt/xterm -ut $*
[root@snowdon X11]# 

Ouch!  Don't use reboot!  If you absolutely have to, sync first...
but a much better way is as follows:

1. cat /dev/null > /var/run/utmp
2. logout
3. log back in...

This should fix the utmp problem, at least until you do something
to corrupt the file again.

David