Jacob,
on cygwin with latest gui tip 9bc6c099eacc0 and
using rundemos as crashtest, I noticed that "more off" is needed.
"Less" seems to wait the q, f .. commands on the original xterm windows and not on the gui window, and in any case the gui frozen.
Marco,
I've already reported the issue a few weeks ago. This is due to the difficulty to attach a running process to a different PTY ("less" is reading directly from /dev/tty, not from stdin). I've investigated the issue a bit, see my previous posts on the mailing list. Up to now, the only working solution I've found is to fork octave-gui, to allow the child process to attach itself to the embedded terminal.
Ironically enough, that problem does not occur on native Win32, because there's no concept of PTY (and a process can attach itself to another console without forking - and forking also doesn't exist in Win32...).
Maybe there's a solution under Linux that does not require forking, but that's a bit out of my league. Low-level Linux experts needed.
Michael.