Xterm has been frobbed in Redhat 6.2 so that the back-arrow key correctly generates a delete character instead of a backspace (C-h) character. There's just one problem... Meta-back-arrow generates Meta-C-h instead of Meta-DEL.
What are you expecting to have happen with META-DEL? It would be helpful in trying to reproduce the problem. Have you found a fix for this by chance? If so, please let me know so I can add it to our next errata release.
This appears to be fixed in XFree86-4.0.1-1.