In this same vein, you can also make the forward delete key stop being worthless and inserting ~ by mapping it to control-option-d.

Call me dumb but I can't figure out how to make the text field accept the option key. Option is reserved and the cursor turns into a crosshair when it's pressed.

Here's how to do it:
1. get the 'Window Settings' window open and select 'Keyboard' as noted
2. click the 'Add' button
3. select 'del (forward delete)' from the 'Key' dropdown
4. select 'none' in the 'Modifier' dropdown
5. 'Action' should be set to 'send string to shell:'
6. now, with the focus on the text field, press control+option+d

That's it, there should now be a string in the field that reads '\004' and the forward delete key should function as intended in the current window and (if you clicked the 'Use settings as default' button) in any NEW terminal windows also.

Does that help?

As soon as the option key is depressed (in combination with the others) the cursor becomes a crosshair and nothing is entered into the field.

I'm sure it's a simple thing but you don't get a lot of flexibility for experimenting in that window.

I've got a Powerbook _and_ an Apple Bluetooth keyboard.

When I try from the Bluetooth keyboard Option gives me the crosshair cursor. So I now tried from the PB keyboard and Option does not give me the crosshair but still nothing goes into the text field.

So I tried simply Control-d from the PB keyboard and it works just fine now. Why is Option needed at all?

All is OK now but still mysterious.

The problem with using control-D is that when you're on a blank line, Del suddenly logs you out.

Other solutions have been offered, but the best in this vein that I've worked out is to use the key combination space, control-T, backspace, backspace. That inserts a space, transposes the space and the next character while moving the cursor forward, then two backspaces delete the two. When you're at the end of a line, this doesn't produce a bell sound/flash like control-F, control-H does.