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 ...