I have an Amazon EC2 Machine running Ubuntu 10.04.
The default user, ubuntu\'s .bashrc seems to be behaving properly, but if I ssh or
.bashrc
ssh
I think your default shell is dash or sh and not bash in this case. echo $SHELL should show it, should it show /bin/sh, it might be a link, so check that ls -l /bin/sh doesn't link to some other shell.
dash
sh
bash
echo $SHELL
/bin/sh
ls -l /bin/sh