General :: Script Run At Startup Does Not Work Under Ubuntu 10.04 LTS

I've got a script than ran fine under Ubuntu 7.10 but I'm having a problem with it under Ubuntu 10.04 LTS. The script runs fine when executed via sudo. The script is in /etc/init.d, it's executable, I registered it with update-rc.d, and (according to ps) it's running. It just doesn't work.

Here's the script:
#!/bin/bash
cd /home/xxxx
while [ true ]; do
kermit -q <pc.kcs
sleep 5
done

kermit is installed and runs properly, the directory /home/xxxx exists, the file pc.kcs exists (remember: the script runs when executed via sudo).