When you put "set -o vi" in a .bash_profile in Red Hat 6.0,
vi mode doesn't work at all.  When you type it in manually,
it works fine.  This seems like a bug in readline, not a
choice of features as Cristian Grafton has suggested.  When
one adds "set -o vi" to a .bashrc, then vi edit mode never
works correctly afterwards.  When you type it in manually,
you get great results.  Once bash processes the "set -o vi"
in a .bashrc, no amount changing edit modes manually will
make vi edit mode work correctly [emacs edit mode seems
unaffected].

It makes the system MUCH more unfriendly to vi users than
the old version was to emacs users.  Yeah, home and end
work, but now nothing else does - at least not for vi users.

The workaround is given by David A. DeGraaf on the
hedwig-list:

I found that the new line in /etc/profile is culpable:
       INPUTRC=/etc/inputrc
When I commented this out bash worked again as it should.  I
have no idea why this line is there or what function is lost
by removing it.  It's just one of those little mysteries...