so far i've only had this happen while connecting to my linux box via ssh, but here goes:
when i'm running nano (text editor, copy of pico really), the delete key deletes the character to the *right* of the cursor, instead of the previous character (to the left). i found the problem: the OSX terminal now identifies itself as xterm-color. i like the color (i.e. in mutt), but i don't like my delete key not working right, so this can be fixed by setting the TERM variable to "xterm" - the only hitch is that this gets rid of the color.
to maintain color AND get the delete-key fix, you can try setting the TERM variable as "xterm-debian" which worked for me. but my linux box is a debian box, so i don't know if this will work for everyone.
here's how: in tcsh:
setenv TERM xterm
(or xterm-debian)
in bash (like if you've already connected to the remote server):
export TERM=xterm
(or xterm-debian)
if you want this to be permanent:
in tcsh: add the setenv command to ~/.login
in bash: add the export command to ~/.bash_profile
i use this second case so that it only affects my connection to my linux box.
hope this'll help some of you :c)