In my case X starts only if ~/.xinitrc file does not exist at all.
Is that line is only one you have in your .xinitrc?
Yes, I have only 2 lines I mentioned in my original post.
Do you have system xinitrc? (/etc/X11/xinit/xinitrc)
Yes, I do.
Is it empty?
No, it is not. It's rather full and contains all default entries, since I've never touched it.
Another thing to mention. As I've found that the error I reported originally:
"/usr/bin/startx: Line 127: hostname: command not found",
apparently has nothing to do with the problem.
It is displayed each time I successfully start X and then kill it. The error then reported upon X exit. It looks to me now that Karol's suggestion of hostname being deprecated is correct and is the reason of the error being thrown up.
So, the only thing remained for now :-) is to find why X fails start with ~/.xinitrc present and being edited as suggested by guide.
Perhaps you should have it actually start a window manager, eg "exec openbox-session" or whatever your preferred wm is.