I have dynamic titling set "after initial title" in preferences, which I
believe is the default. My tabs show inviariably Untitled. My PS1, in
case it matters (I think it doesn't) is '\w\$ ', but it also chokes
with the default one.

I have XFCE 4.10 in another machine (Fedora 18) and it works flawlessly
there (user@machine:directory no matter what PS1 is). Don't know if
because of the newer version or the distro.

My tabs initially show "Untitled", and stay as such until I use the su command
to become root. While being root, the tabs show

root@hostname: /path/to/dir

where /path/to/dir is correctly updated after each use of cd. But using exit to
get back to my normal user, the tab title stays as the last state it had while
being root. So there seems to be a bug somewhere keeping the tab title to get
updated while being non-root.

Best regards,
Torquil Sørensen

If updating works as root but not as non root, I'd say it's likely a
difference in the shell configuration between the user and the root user, it
might be worth checking. Note that I don't think the default bash setup
(whether root or not) is configured to update the terminal title.

Regards,

PS1 matters indeed. This is where the dynamic title is set. xterm and
its clones recognize a few OSC control sequences, such as \033]0 or
\033]2, the former sets both icon name and window title to the text
following the control sequence, while the latter only sets the window
title.

Bash, the default shell on Debian, is shipped with its default
.bashrc, which sets
PS1="\[\e]0;${debian_chroot:+($debian_chroot)}\u@\h: \w\a\]$PS1" for
xterm. The relevant part here is between the \e]0; ... \a control
sequences. \a is the bell character that terminates the OSC control
sequence.

Make sure to return to defaults or adjust the text to show to your
liking. Compare PS1 on both machines and correct the broken one
appropriately.