This odd problem is because of your framebuffer. That little linux penguin you get on boot seems to screw things up sometimes in the framebuffer. Most of us have see that phenomenon before
There are a couple ways to get around it.
After boot, use something which takes up the whole screen, like vim or emacs, or mc.
Then it should work fine.
Don't use a framebuffer. (Worst solution... i like having a bigger screen in console.)
Disable the penguin logo in the kernel config and recompile.
--Shade