Can't get less to work with gnome-terminal

[Harry Henry Gebel <hgebel inet net>]

Hello,
	I just changed from gnome-core-1.0.6 to gnome-core-1.0.7 and less no
longer works with gnome-terminal. The exact error message is:

[hgebel@localhost biglist]$ less biglist.py
WARNING: terminal is not fully functional
README  (press RETURN)

After pressing return the file comes up but the cursor keys no long work
to scroll though the file, I have to use the alphabet keys. This problem
occurs whether I pass the file as an argument on the command line or
send data in a pipe. What am I doing wrong

 I am running Redhat 6.0 with all gnome files installed from source,
gnome-core-1.0.7, gnome-libs-1.0.10

This is the gnome-terminal configuration file:
[Placement]
Dock=Menubar\\0,0,0,0

[Config]
font=-misc-fixed-medium-r-normal-*-*-120-*-*-c-*-iso8859-1
wordclass=-A-Za-z0-9,./?%&#
scrollpos=right
bell_silenced=false
blinking=false
swap_del_and_backspace=false
login_by_default=true
scrollbacklines=1024
color_set=4
color_scheme=linux
foreground=rgb:ffff/ffff/ffff
background=rgb:0000/0000/0000
menubar=false
scrollonkey=true
scrollonoutput=false
transparent=false
shaded=false
background_pixmap=false
pixmap_file=


	Thanks for any help,
		-Harry