The bash shell (I assume your using bash)
uses special key sequences to display the prompt.
The prompt is controlled by a variable called PS1.
To see the current prompt, type [B]echo $PS1[B],
the full path is displayed by a \w, to see only the
working dir, you need to change this to a Capital W.
Be sure to set your variable using qoutes:
[B]export PS1="[\u@\h \W]$ " [B]
Note, no spaces around the equal, but a space after the $ if you want it.
Also, from your echo command above, you may have seen a lot of other
stuff, this is usually to set the colors, add those back in if you want.
Variables only exist in RAM, if you want them set when you login
in, add the line above to ~/.bash_profile,
if you want it anytime you open a shell, add it to ~/.bashrc