Hi Jim,
Sounds like from your description that VNC works differently (and better) on OS X than linux. As I said I've only used it on linux, since I can't seem to get a non corrupted version of it for mac. Basically on linux, VNC runs it's own X-Server which does not connect to any real video output. To view this X-Server you have to log into it using a VNC client. So, it is impossible to have a locally viewable desktop in VNC for linux. I believe there is another program (or a hacked version of VNC) out there that does allow this for linux, but I haven't had the need to look for it.
I think it might be helpfull if I describe the particular situation I planned on using desktop sharing... maybe you have a better solution for me? I have a powerbook that during parties or house cleaning or whatever I connect to my sterio using Y-cable. I want to be able to both be able to control the music I'm playing using Itunes on the powerbook itself as well as from my other computers, located at various places throughout the house. The powerbook is the only mac, and the pcs are running linux (latest redhat distro) and Windows XP. Oh and I'm using a wireless lan to connect all the computers, if you were curious.
-Venkman