This bug was fixed in the package vte - 1:0.26.0-0ubuntu2

---------------
vte (1:0.26.0-0ubuntu2) maverick-proposed; urgency=low

  * debian/patches/lp621927_set_default_term.patch: properly set TERM
    environment variable if unset on vte_terminal_init so applications started
    from the wm menus properly get a sane value to begin with (LP: #621927)
 -- Mathieu Trudel-Lapierre <[email protected]>   Tue, 05 Oct 2010 15:02:50 
-0400

** Changed in: vte (Ubuntu Maverick)
       Status: Fix Committed => Fix Released

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Embedded Terminal Emulator isn't giving a TERM variable
https://bugs.launchpad.net/bugs/621927
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