When setting up a new OS X install, one of the settings I always set in the Terminal.app is the `Use option as meta key` option. This allows you to use the Option key instead of Esc as the meta modifier.
One of my Terminal uses is running IRSSI inside a screen session. To switch between windows in irssi I always use `option + left/right arrow` however in Lion this does not seem to work by default.
After some googling I didn’t find anything that offered a solution so I dug through the Terminal.app preferences and noticed some additional presets in the Keyboard tab that aren’t there is previous versions of OS X.
To fix it, in Terminal.app go to
Preferences -> Settings -> Keyboard
Locate the two settings
`option cursor left` and `option cursor right`
as named in the Key column and delete them by selecting one and click the - (Minus) button at the bottom of the window.