Absolutely untrue. The X server is an orthogonal issue to UI design. The real problem is that a lot of Linux apps still have GUIs designed by programmers rather than UI designers.
Even very popular OS apps, such as GIMP, Inkscape, Open Office have questionable design.
Granted sometimes UI designer can misunderstand user experience in a particular domain, but programmers are more apt to do so.
Disclaimer: I program and sadly, also design(not by choice, I can't really design) UIs on Linux.
I agree with this, it has nothing to do with X. this has to do with design choices, and the method in which the consensus is achieved.
My friend Mushon Zer-Aviv is attempting to tackle this issue
http://www.mushon.com/2009/12/18/shortaudio-my-open-source-d...