Description of problem: I think this is too difficult not to notice, but anyway: Alt is ignored, so Alt-b, Alt-backspace behave like b, backspace respectively. Version-Release number of selected component (if applicable): gnome-terminal-2.1.32 vte-0.10.7-2
Which locale is your system in? Alt-b produces Escape,b in en_US.
Ah... Using default Czech installation (cs_CZ.UTF-8 et all), Alt-b bash in in gnome-terminal correctly skips words, but Alt-backspace deletes only one character at a time, not one word at a time. When I run setxkbmap -symbols 'czsk(us_cz_qwerty)' -compat group_led (this used to be -layout in 8.0, BTW), Alt-backspace doesn't work either and in addition, Alt-b just outputs 'b'. The czsk keyboard is there only for compatibility, there is supposed to be a better mechanism for X keyboard switching in XFree 4.3, which I haven't tried yet. So, Alt-Backspace doesn't work in cz in default install. Consider Alt-B NEEDINFO until I try the recommended way to replace czsk or get more data. Thanks.
This should be fixed in 0.10.9 and later. Please reopen this bug ID if you find that this is not the case.
*** This bug has been marked as a duplicate of 80252 ***
Changed to 'CLOSED' state since 'RESOLVED' has been deprecated.