ssh2 in xterm problem

[Hans Werner Strube]

I have the Windows version of ssh2 (SSHWinClient-3.1.0-build235 from ssh.com)
installed. Besides the Windows GUI client, there is also a command line
client ssh2. This works well from the Cygwin login shell. But when I call
it from an xterm shell in XFree86-4.2.0, the password prompt appears not
in this shell but in the login shell from which X was started. I tried to
enter the password there but without any effect. When I enter the password
in the xterm, it is echoed and has no effect either.
What is the reason for this strange behaviour, and can it be circumvented?
(Well, don't tell me I could install openssh; this seems to indicate a basic
problem to be solved!)