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The short answer is no. X does not read login files on its own. However, it may inherit the settings from the environment in which it is started. If you start an X server from the command line, it will be run as a subprocess of the shell process, so it will inherit its variables. If you log in graphically--that is, if the X server is already started when you log in--your shell login variables will never be read. If you typically log in this way, you should set your environment variables in your .xsession.
Even if X inherits your environment variables as a subprocess of a login shell, it may not pass them to certain client programs. Users are commonly perplexed that variables like their prompts and paths are not passed on to xterm. That program, along with its successor rxvt, ignores those shell environment variables. That way, you are not forced to use every xterm shell as a login shell. Instead, instances of xterm take a special argument telling them whether to behave as a login shell--i.e. whether to read your .login or .profile. The argument is -ls for login shells and +ls for non-login shells. The default is +ls; hence comes the confusion.
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