OSX Lion Terminal: unknown terminal "xterm-256color"

Here's an annoying issue that I've run into a few times while using the terminal (or iTerm) on OSX Lion.

tput: unknown terminal "xterm-256color"
No entry for terminal type "xterm-256color";
using dumb terminal settings.

The issue derives from OSX Lion's terminal color settings, which is not always compatible with the settings on remote servers. There are a few ways to fix this issue.

Some options:

• manually set: $ export TERM=xterm-256
• override $TERM in ~/.profile on remote server:
  

  [ "$TERM" = "xterm" ] && TERM="xterm-256color"
  alias ls='ls --color'

• change the emulation type for terminal from xterm-color256 to xterm-color, in preferences->advanced