ssh is pretty standard for this (Score 4)

Ssh is very easy to configure for this - indeed many installations turn it on by default! Read your ssh client docs for how to do it or do a google search. This works great for unix and windows-based ssh clients and X servers.

Even with this, you must still secure your X server. Do not use host based security(xhost)security, make sure that is set to allow no hosts. (I think you need to allow localhost if using windows with ssh - it's been a while )

I would use the ssh mechanism even on the local LAN as it is simple to implement and pretty
transparent to users.

Magic cookie with xauth works well. I know there are issues with the type of cookie and whether you are using NFS to distribute the cookies, etc. but I haven't worked in that type of environment in a while. R5 can do XDM-AUTHORIZATION-1, but you had to do some tweaks to make it work.

There is an old oreilly book 'X Window System Administrator's Guide' that is pretty good, though it doesn't cover release 6. Presumably
R6 added some security stuff, but I've never looked into this.

This seems somewhat informative:
http://www.linux.org/docs/ldp/howto/mini/Remote- X- Apps-6.html

Hope this helps,
TeX