1. Parent creates a forked copy and sleeps for 5 seconds
2. The forked copy sleeps for a second.
3. The forked copy launches a shell.
4. The shell executes xterm in the background and exits.
5. The forked copy exits.
6. The sleep ends
7. You try to kill a process that exited almost 4 seconds earlier.

You want the shell to stick around until the xterm exits. Do so by removing the "&".

Since we don't need to keep the forked copy around since at all it does is exit (with a wrong code), use exec instead of system.

#!/usr/bin/perl

my $fname = "/tmp/help.txt";
system("echo help me > $fname");

my $pid = fork();
if ($pid == 0)
{
   exec("xterm -T hello -e tail -f $fname");
   exit($! || 255);
}

...
[download]

Even better: Avoid the shell and use a safer interface.

#!/usr/bin/perl

...

my $pid = fork();
if ($pid == 0)
{
   exec('xterm', '-T', 'hello', '-e', 'tail', '-f', $fname);
   exit($! || 255);
}

...
[download]