mode - Vim does not work on existing text, custom compilation of vim7.3

I am on a ubuntu 10.04 machine. The installed vim7.2 works as expected in insert mode for but my custom compiled vim7.3.744 shows a strange behaviour:

Starting vim with an empty buffer (cursor indicated by |):

~|

When I switch to insert mode, and type a few letters the commands work just fine:

~adsf|

=>

~|

However, when I leave insert mode after typing and enter insert mode again and press nothing happens:

~adsf|

Pressing A to enter insert mode again

~adsf|

=>

~asdf|

If I should show :ver I can do this.

Update

Note: the vim setting backspace is set in $VIMRUNTIME/debian.vim which /usr/bin/vim7.2 uses for startup.

Answer

Try ":set backspace+=start". You may want to go the whole way and do ":set backspace=indent,eol,start".

See ":help 'backspace'" (the single-quotes are meant to be typed).