Package: diskless
Version: 0.3.18.0.5
Followup-For: Bug #261829

as init.orig somehow does not inherit the environment from init, a number of 
scripts
fail (most important /etc/rcS.d/S02mountvirtfs and the TERM variable is
lost) applications that want to open a pseudo-tty simply fail....

one solution would be to set the term in inittab for getty and other
apps that need it  and  save the environment via /sbin/init and load it
again in /etc/init.d/rcS ...

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