How to copy text to xterm

To paste text copied from other windows (like you said firefox) in xterm window click the mouse wheel or center mouse button.

As noted by yasouser, middle-click is the standard way to paste the selection buffer in linux. This buffer gets written every time anything is selected with no need to initiate a copy command. In gtk based or influenced apps, there is usually a keybinding for this as well. Shift+Insert

In most Desktop Environments there is also a copy buffer that is separate from the selection buffer. Getting items into this usully requires a keyboard shortcut like Ctrl+C or menu selection, and pastes with Ctrl+V or a menu. These bindings are program specific and may varry, although they usually follow toolkit standards.

On KDE there is often a clipboard buffer configured by default in the tray that handles access to several recent clipboard items. This sort of function can be added to gnome and other environments as well.