BACKSPACE does not work on bash3.0

[Jeff Chua]

Configuration Information [Automatically generated, do not change]:
Machine: i586
OS: linux-gnu
Compiler: i586-pc-linux-gnu-gcc
Compilation CFLAGS:  -DPROGRAM='bash' -DCONF_HOSTTYPE='i586' 
-DCONF_OSTYPE='linux-gnu' -DCONF_MACHTYPE='i586-pc-linux-gnu' 
-DCONF_VENDOR='pc' -DLOCALEDIR='/usr/share/locale' -DPACKAGE='bash' 
-DSHELL -DHAVE_CONFIG_H  -I.  -I. -I./include -I./lib   -g -O2
uname output: Linux boston.corp.fedex.com 2.6.8.1 #1 Mon Aug 16 08:33:10 
SGT 2004 i686 unknown
Machine Type: i586-pc-linux-gnu

Bash Version: 3.0
Patch Level: 0
Release Status: release

Description:
        BACKSPACE delete character instead of moving to the left in
        overstrike mode.
        BACKSPACE will only move to the left works only for the first
        command recall. It will "delete" the character instead of
        moving to the left for subsequent command recalls.
        Version 2.05b is ok.
        BACKSPACE is set as "^H", "stty" erase is "^H"

Repeat-By:
        > bash
        > <ESC>k$<BACKSPACE><CTRL>C     <== this works for 1st time only
        > <ESC>k$<BACKSPACE><CTRL>C     <== deletes instead of moving left



Thanks,
Jeff