terminal.app on OS X Leopard Backspace

When using terminal.app on OS X Leopard the backspace works correctly until I ssh onto another machine, running debian and normally accessed by putty from a windows machine.

When ssh'd onto the external machine the backspace acts as a delete key.

There is some outdated advice here http://www.macosxhints.com/article.php?story=20060825071728278

I fixed the Problem by going to terminal.app
Terminal -> Prefferences settings tab, advanced sub tab then select "Delete sends Ctrl-H"

This fixed the problem for me.