Why on earth would anyone want to use twm? You want to move anything to
extras, it's that.
So, why are the calls to the system xinitrc commented out?
Here is my ~/.vnc/xstartup file:
#!/bin/sh
# Uncomment the following two lines for normal desktop:
# unset SESSION_MANAGER
# exec /etc/X11/xinit/xinitrc
[ -x /etc/vnc/xstartup ] && exec /etc/vnc/xstartup
[ -r $HOME/.Xresources ] && xrdb $HOME/.Xresources
xsetroot -solid grey
vncconfig -iconic &
xterm -geometry 80x24+10+10 -ls -title "$VNCDESKTOP Desktop" &
twm &