It seems that faces is ignoring the -d argument completely--a bug.
In fact, looking at the source (x11.c:init_graphics), faces opens the
display _BEFORE_ it processes its command line arguments (which happens
in x11.c:make_frame).
I've Cc'ed this to the faces mailing list in the hope that someone will
eventually fix it. Meanwhile you can work around this bug by:
(setenv DISPLAY prl323:0.1; faces)
Mark Shand.