I\'ve done something to break my Bash Shell Prompt in OS X (10.5.7) Terminal.
This is the PS1 that I had configured:
PS1=\'\\[\\e[1;32m\\]\\h\\[\\e[0m\\]
I am now using this PS1 with good effect:
green=$(tput setaf 2)
blue=$(tput setaf 4)
bold=$(tput bold)
reset=$(tput sgr0)
PS1="\[$green$bold\]\h\[$reset\]:\[$blue$bold\]\w\[$reset\]\$ "
Scrolling through my command history appears to handle line wraps now. However in the meantime since this question was asked I have also updated my OS X to 10.6.3