Reboot the server after making all of the above changes. Then, just turn on the workstation and you should see it query the network for it's IP information, then you should see a tftp transfer of the kernel and the kernel will begin booting. You should then see X-Windows come up, and finally, a login window should appear.
If it fails somewhere along the way go back through the instructions above and double check the setup. If you are still having trouble, join the LTSP discussion mailing list, available at http://www.ltsp.org/mailinglists.html