It does seem to have 256 color support - I'm seeing lots of red, blue, green, pink.

Haven't checked which color escapes (16 or 256) it actually supports, but it does do the xterm-color color escapes just fine. GNUS looks really nice, for instance. :-)

The correct terminfo for 256 colours is xterm-256color, not xterm-color (which is obsolete). Simply the 'xterm' terminfo is sufficient to indicate 16 colour support these days.

That's good advice on ncurses-based systems.

This is Solaris 10 (SysV curses, with a hand-imported xterm-color terminfo entry). :-)