As a breadcrumb for anyone stumbling across this via google, I also had to install the latest X 11 to get the X windowing to show me anything. X 11 is grayed out on my install disks in the optional installs for leopard. Until upgrading X 11, the terminal window would run and the X 11 process would launch, but no visible window would appear.

http://trac.macosforge.org/projects/xquartz/wiki/X112.1.4

Now the macports putty is working. Sweet!