3: allow backspace
stty erase "^?"

4: get a informative prompt (second is with color)

PS1="[\[email protected]\h \W]\\$ "
PS1="\e[0;34m[${USER}@${HOSTNAME%%.*}:${PWD/#$HOME/~}]$ \e[m"

Example:

bash-2.04$ PS1="\e[0;34m[${USER}@${HOSTNAME%%.*}:${PWD/#$HOME/~}]$ \e[m"
[[email protected]:~]$