I have run into this three or four times now. Each time takes some googling, and that is counterproductive. So here you go. For all of the times you get a new mac, or install a new version of OSX, and you start seeing weirdness in terminal.app while SSH’d into a *nix box..

Through trial-and-error, this seems to be the best way to unbreak the Backspace key on a Mac when using the native Terminal.app to SSH to a (Debian) Linux machine, and then running Emacs inside a Screen session.
Open Terminal -> Preferences
Declare terminal type ($TERM) as: rxvt
Open Terminal -> Window Settings
Choose Keyboard panel
Uncheck "Delete key sends backspace"
  (i.e., this setting is "off")
Click button "Use Settings as Defaults"
This way, you shouldn't have to mess with stty; you'll still get all the features of xterm-color (ANSI color text, screen save/restore, etc.); and the Backspace key will work normally, even in this situation: Terminal.app -> SSH (to Debian box) -> Screen -> Emacs

Under Snow Lepoard - you do not need to mess with the Uncheck Delete key.. stuff.

Thanks, Chad!