user can not view nodes of custom content type
I assume that you just forgot to publish the content. Since the first user has access to every content, he can see unpublished content from the userX, but userX cant see unpublished content created by user1. To change this behavior you could give userX the permission "bypass node access".

For further explanation take a look at the official documentation:

http://api.drupal.org/api/drupal/modules!node!node.module/group/node_access/7


  In determining access rights for a node, node_access() first checks whether the user has the "bypass node access" permission. Such users have unrestricted access to all nodes. user 1 will always pass this check.


Edit: As mentioned in the comment, although this solution solves the initial answer, in most cases it isn´t good to give the "bypass node access" to a large number of users. In the case which is described in the comment, you should use a more sophisticated module for content pushblishing like the Workflow Module.