What is the "-nolisten tcp" parameter for X

The option is there to avoid the security problems inherent in xhost +IP. Removing it will cause no problems but can be a security risk, it's up to you. As far as I can tell the option causes the X server not to listen for incoming connections.

The documentation for the generic X server options may be found in man Xserver:

    -nolisten trans-type
                disables a transport type.  For example, TCP/IP connections can
                be disabled with -nolisten tcp.   This  option  may  be  issued
                multiple  times  to  disable  listening  to different transport
                types.

As mentioned this option disables any TCP/IP based access to the X server - which is what you generally want as X11 security is not particularly strong. It is better to tunnel X11 over ssh if you need remote applications to display on your X server (e.g. ssh -XY remote_host xeyes Note: the -X option enables X11 forwarding, and -Y enables trusted X11 forwarding - which is not subject to the X11 SECURITY extension controls.)