gnuplot error

[Robert Fong-tom]

Hi,
I just installed binary Octave 3.0.3 from Octave-Forge and now get  
the following error:

gnuplot: unable to open display ':0'
gnuplot: X11 aborted.

I am running OS X 10.4 (Tiger) i386. I deleted Octave 3.0.2 and all  
packages (also downloaded from Octave-Forge) then reinstalled the new  
version and the packages. I did this because I had problems just  
installing the new version by replacing the 3.02 with 3.0.3. Also, I  
have been trying to install the image package without luck. I even  
tried porting it from MacPorts but gave up. I suspect that MacPort  
may have changed my environment because I noticed that after  
downloading MacPorts, Octave started under Terminal instead of X11.   
Is anyone familiar with this issue and know how to fix this problem?
Bob