Q:

"M-" bindings in vim on iTerm2/Terminal don't work

I noticed that iTerm2 offers the very convenient feature of using "Option key as +ESC" (or as meta, but apparently that's obsolete). 
I tried them both and the option key works as expected in Bash (set -o emacs mode) and Emacs, but not in Vim. Thus, I can't make use of any "M-" bindings.
What I've found is that:

if I set option to "+ESC", vim just understands ESC+key, and has no idea I actually meant Meta-key.
if I set option to "meta", keys modified with "option" behave just as without a modifier (don't know how to formally test what vim understands from a key combination that I'm typing).

"M-" mappings work perfectly in MacVim (7.3.53), but that's outside of a console and not in the scope of this question. 
I'm interested in how to make those mappings work in Vim, under iTerm2 or Terminal.
My specs:

MAC OS X Lion 10.7.2
iTerm2 1.0.0.20111020
vim @7.3.107_0+python26 [though MacPorts]

A:

I've downloaded the latest iTerm2 and tried to see what it sent to/what was printed by Vim (i<C-v><M-a>) with the following settings:

Option as Option:
Vim prints æ which is normal and expected on my french keyboard
Option as Meta:
Vim stays there, waiting for something to happen. Nothing is printed. If I press Option and a in sequence I just obtain a. Pressing Option and a in some random order may print á, which is weird and totally unexpected.
Option as +ESC:
Vim prints ^[a which means "Escape character followed by the character a".

From these tests it appears that Vim will never ever receive <M-> without some hypothetical black magic.
If you stick with "Option as +ESC", it seems that you will have to change all your custom <M-something> mappings to <Esc>something. This may work but it will make writing any kind of prose in any non-english language a pain.
What I do: I leave the Option key as it is so that I can type characters like œ…«» easily and I use <Leader> (mapped to ,, see :help mapleader) for all my custom mappings. 
Some people here like to reserve it for plugins and advocate a somewhat simpler and potentially safer approach.
inoremap <leader>, <C-x><C-o> "my way (copied elsewhere)
inoremap ,, <C-x><C-o>        "another way

A:

I left my option key to act as Normal and discovered that Vim saw them as <T- bindings. So, for example, I have this mapping setup in my .vimrc to move to the end of a word when in Insert mode:
noremap! <T-Right> <C-o><Right>;

