Can't run GUI, startx doesn't work on VPS

Hello,
So I installed Ubuntu 11.04 i386 on my VPS with standard procedure found on most tutorials out there.
sudo apt-get update
sudo apt-get install ubuntu-desktop (later i tried with xubuntu-desktop but no luck)
sudo install xfce4 etc
But when I type startx I get this message and later I opened the log.

Fatal server error:
xf86OpenConsole: Cannot open /dev/tty0 (No such file or directory)

Please consult the The X.Org Foundation support
         at http://wiki.x.org
 for help.
Please also check the log file at "/var/log/Xorg.0.log" for additional information.

 ddxSigGiveUp: Closing log
xinit: giving up
xinit: unable to connect to X server: Connection refused
xinit: server error
root@vwchox:/# tail /var/log/Xorg.0.log
[2738844.480]
Please consult the The X.Org Foundation support
         at http://wiki.x.org
 for help.
[2738844.480] Please also check the log file at "/var/log/Xorg.0.log" for additional information.
[2738844.480]
[2738844.480] (WW) xf86CloseConsole: KDSETMODE failed: Bad file descriptor
[2738844.480] (WW) xf86CloseConsole: VT_GETMODE failed: Bad file descriptor
[2738844.480] (WW) xf86OpenConsole: VT_GETSTATE failed: Bad file descriptor
[2738844.480] ddxSigGiveUp: Closing log

I tried to connect remotely using VNC but no luck. I am pretty new in Ubuntu and all other Linux OS.

Thanks.