Many times I have come across broken terminals screwing vim handling of shortcuts. Or vim just do not expect that some keys may produce such long sequences.
The most common sign - '--INSERT--' isn't displayed immedaitely after pressing insert key.
The cure is:
Put that three lines into the beggining of the
P.S. The tips is located in vim's excelent help system under the keyword "xterm-cursor-keys". Type that in vim -
:help xterm-cursor-keys- to get there.