The keyboard bindings in iTerm on OSX Snow Leopard are fubar. To fix them either switch to Linux or put this in your zsh or bash configuration:

   1  bindkey "^r" history-incremental-search-backward
   2  bindkey '^E' end-of-line
   3  bindkey '^A' beginning-of-line
   4  bindkey 'ƒ'  forward-word
   5  bindkey '›'  backward-word
   6  bindkey "^F" forward-char
   7  bindkey "^B" backward-char
   8  bindkey "^k" kill-line
   9  bindkey "^u" backward-kill-line

   1  › = alt+b
   2  ‹ = alt+v
   3  … = alt+.
   4  – = alt+-
   5  ’ = option+m
   6  ” = alt+shift+m
   7  “ = alt+shift+n