Ok. Heres the thing.
That WHOLE prompt is made up of what a terminal emulator will see as "non printing characters."
So it will not make adjustments to the line wrap. It will assume, that even though 30 characters are already in use from your prompt, once expanded, that you are in fact at pos 5 on the line. Hence your issue.
The EASIEST way to fix this is:
when you log in, run a quick:
Or you can look up how non-printing characters affect your line length and fix your prompt globally.
edit: here is the first link regarding it. quick glance says it is what you are looking for.
http://mike.geek-republic.com/2009/0...e-wrap-issues/