When using the default PS1 prompt that MAC OS/Terminal comes with, when you type sh you get a new style prompt.
station-4:~ user$ sh
sh-3.2$
When you export your own PS1, this functionality goes away. You type sh and you still get the PS1 prompt you specified. Why is this?
station-4:~ user$ export PS1=">>>"
>>>sh
>>>
which shto see what your shell is, and check the result for symlinks. – Kerrek SB Jul 2 '11 at 11:07