When using PuTTY set your TERM variable to pterm.

Here are the PuTTY settings to change to make it work well:

Terminal
  Keyboard
    The Backspace key: Control-H 
    The Function keys: XTermR6

Window
  Rows: 25
  When window is resized: Change the size of the font

  Translation
    Received data: CP437
    Display line drawing characters: Use font in both ANSI and OEM modes

  Colours:
    Default Foreground: White
    Default Background: Navy Blue
    ANSI Blue:          Yellow

  Colours (Alternate):
    Default Foreground: Black
    Default Background: White
    ANSI White Bold:    Cyan

Connection
  Terminal-type String: pterm