I noticed using Terminal to connect via SSH to an IPv6 server and opening a file with nano, character repeats and skipping of the display when pressing and holding backspace or when typing rapidly. This is only new since I installed OS X 10.7 Lion. I seem to have solved the issue by going into Preferences for Terminal.app and selecting the Advanced tab and changing Declare terminal as: to xterm-color from xterm256-color.
Hopefully this helps someone else.
Still, it was frustrating for several days!
I changed the prefs as you suggested, and it is helping on some windows, but it seems worse with non-standard font sizes, such as when in full screen mode or CMD+ resized windows.
I use Terminal for SSH all day every day, nano frequently, and I cannot afford to have broken config files due to this problem.