This article is from the WINE WINdows Emulator FAQ, by Dave Gardner firstname.lastname@example.org with numerous contributions by others.
Being a GUI (graphical user interface), MS Windows does not have a
character mode, so there will be no character mode for Wine. So yes, you
must run Wine under X.
On the other hand, Win32 does have a character mode. Currently, Wine must
have a display even to run console-only Win32 apps.