The INPUTRC environment variable should be set to /etc/inputrc after bash is installed. The file is placed there, but is not used by the system unless the variable is set. It fixes most issues with backspace and delete which could be seen as a wrong to many people.
*** Bug 849 has been marked as a duplicate of this bug. ***
Maybe this does not belong here, but THANK YOU SO MUCH FOR THIS BUGREPORT! :)) - Rolf (with working DEL key and umlauts, finally)
Added to CVS.