Arrow keys doing funny things when you use vi in iTerm 0.9.5? It’s because we’re too used to messing with things. Set your Default bookmark’s keyboard type back to Global.
“When the terminal type of your sessions is set to one of those “xterm” types, iTerm handles the arrow keys, the home key, and the end key in a special way." says the FAQ while not actually addressing the solution.
But who can complain? Global works well now! Hooray!