I log in from inside an xterm/eterm on RH 7.3 as root on a RH 9 server, and
mc, just like some other tools like netconfig looks completely broken.
It's unusable, see screenshot
Created attachment 91241 [details]
screenshot showing the mc brokenness
Notice that the font is incorrect too and displays things like a's instead
You have to match the encoding of mc to the encoding of
your terminal. The encoding of mc comes from the locale; for
example, LANG=en_US.UTF-8 gives UTF-8 encoding,
LANG=en_US.ISO-8859-1 gives Latin-1. 7.3 terminal will be expecting
Latin-1 by default. RHL 9 gnome-terminal has a menu Terminal->Character Coding
which can be used to change encoding to match remote systems.
This can't be done automatically because the ssh and telnet protocols do
not include encoding negotiation. A screwup in those protocols, so
the only solution is to manually set your encodings properly.