XTerm pastes from the PRIMARY selection by default. To make it paste from clipboard on shift-insert and use shift-btn up to copy to clipboard:
Put in your .Xresources (or .Xdefaults). Confused: Difference between .Xresources and .Xdefaults tl;dr: Xresources: new, sticks to server but must be loaded with xrdb, Xdefaults: old, loaded on the X client filesystem, not read if xrdb has been used.
PS: the program that can grab the hierarchy of Xt windows is editres
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