Following this question, running /usr/bin/reset destroys my backspace functionality.
What can I do? After pressing backspace I get ^?
This will make the terminal interpret the key as Backspace:
stty erase "^?"
(^? can be either the Backspace key, or the literal ^ ?.)
Probably you need to fix you TERM variable to more accurately reflect the terminal emulator you are actually using. See man reset.
What's happening here is reset is putting things into a very vanilla state to insure that you can do some interaction with the terminal. If your login scripts set up any key interpretation rules not covered by your TERM variable (like the one suggested by grawity), you will have to reapply these by hand.