I and other people have noticed that recent versions of current and
   1.1 seem to require that you do a stty sane or the moral equivalent in
   order to get anything done. Any reason this happened?

a change went into kern/tty_compat.c recently before the release
that, while it fixed some nastier bugs, the added some more annoying
ones (ie, they are fixable with running an stty command, but, more
people are bound to hit them).  charles had made a fix to this but
it's isn't in the tree at this point.