My bash prompt is:
PS1='\e[1;31m\]\[\u\e[0m\]@\h [\e[1;33m\]\w\[\e[0m\]]\$ '
(reddish username, yellowish current directory).
If I connect with Putty from a Windows machine, everything is fine. If I open a terminal window from within the Ubuntu Desktop (a fresh install of 10.04 TLS), the first character of the username and the first character of the path are replaced with Unicode +0002 (a square box showing is drawn in ASCII text below).
__ |00| |02| __
The character encoding in the Ubuntu terminal is UTF-8. Putty's translation setting which does the same thing is UTF-8 as well.
Any hints of what is wrong would be appreciated.