I guess MacFixIt is a for-pay Mac forum or something, but using Google I found this description by bhughes attached to this list of Rosetta-compatible apps of exactly the very annoying behavior I was seeing trying to use screen with iTerm:
Contrary to the listing above iTerm doesn't really work properly. Parts of the keyboard come and go - you can start it one time and have no spacebar, start it another time and the 'zero' key doesn't work. The only thing that seems to universally be broken is 'ctrl-c' - can't figure that one out.
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Have you tried GLTerm? I’ve always thought it was better than iTerm and Terminal.app. It only lacks tabs
Unfortunately the GLTerm author appears to be the most anti-Intel-switch developer I’ve seen: http://oomz.net/GLterm/index.html
You can download it from here: http://www.pollet.net/GLterm/