> 
> What shell are you using, and does the problem persist if you start your
> shell without config files?

 
That seemed to be the problem -- by .bashrc had export TERM=xterm.  I still
don't understand why that would override trying to set TERM directly in screen,
but after I had removed the line from bashrc and toyed around with $TERM
setting, I was able to get 256 color support under xterm.





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