Comment 8 for bug 290981

Ok, this makes me think it may be ipython bug after all.

I can't debug this properly now, but iplib.py has this snippet in raw_input:

                if self.has_readline: # and some config option is set?
                    try:
                        histlen = self.readline.get_current_history_length()
                        if histlen > 1:
                            newhist = self.input_hist_raw[-1].rstrip()
                            self.readline.remove_history_item(histlen-1)
                            self.readline.replace_history_item(histlen-2,
                                            newhist.encode(self.stdin_encoding))
                    except AttributeError:
                        pass # re{move,place}_history_item are new in 2.4.

Try disabling that code (if 0:). It's used to support multiline history editing, which may be buggy.