Anybody else having tty handling problems when logged in to NetBSD
   over network?  

you have this problem with rlogin as well?  i've seen it with older
telnet clients and netbsd's telnetd .. which was solved by adding
the -k switch to the telnetd line in /etc/inetd.conf.  this turns on
line mode kludge support which is needed to support real shells
(those with command line editing) with older telnet clients (such as
anything that comes with sunos 4).

never seen it with rlogin, but i've heard weird stories about rlogin
lossage and weird *local* tty modes...

.mrg.