Even when "Enable Application Keypad" is selected, xterm is sending normal numbers rather than escape sequences for the numeric keypad. This breaks the edt emulation in jed, among other things. The version of xterm shipped with RH6.2 does not have this problem (even if used with XFree86 4.0.1)
Workaround: add a modifier Num_Lock with xmodmap. It doesn't matter which modifier it is, nor if it is bound to a key which actually exists. The function VTInitModifiers in input.c detects the existence of the modifier and then xterm sends the correct escape sequences, making it possible for jed to work. It would appear from line 443 of input.c that this behaviour is deliberate. i.e. if there is no Num_Lock key, never give escape sequences for the numeric keypad, just the normal numbers. In this case, there is no way for the application to distinguish between a number key on the main keyboard and one on the numeric keypad. This behaviour is different from previous versions of xterm. Is there a good reason for the new behaviour?
Not a bug. This is a configuration issue as you've noted. xmodmap is the way to go.