Holding down S on startup boots you into Mac OS X in "Single User Mode" -- and in Mac OS X, it's not a good thing to do. It's meant to be used for low-level repairs if your system gets really screwed up and something is preventing Mac OS X from booting.
To access the command line, wait for Mac OS X to finish starting, and type in ">console" at the login window. This will unload Quartz and give you a text-based prompt.
Mac OS X does not include an X Window server. There are some instructions posted on getting XFree86 working at
http://mrcla.com/XonX . There's a link to downloadable binaries there, as well as instructions on building a new release if you have the inclination and the developer tools.