I believe answers to both questions are actually "yes", although some
manual configuration might be required. Unfortunately, we do not support
TightVNC versions 1.x (including the one for Unix/Linux), so I cannot
give you exact answers, but I can point you to some useful directions.
a) You should remove the -rfbauth option (and its argument) from the
command line that starts Xvnc (or Xtightvnc, depending on the Linux
distribution). Probably that can be achieved by editing the vncserver
(or tightvncserver) script.
b) As far as I understand, you should configure TightVNC Server so it
would work together with XDM (GDM/KDM/etc.) and inetd/xinetd. In this
mode, VNC server sessions will be created on demand when a VNC client
connects. There were some tutorials on this subject that can be found in
the internet, I've just made a quick search (xdm tightvnc) and found
this one (no guarantees that it works though):