Today I fired up my computer and ran the little script... it didn't work! The guy (me(tty2)) could see the password he typed in, and nothing went back to to tty1 . Also when I sued in tty2, and ran the script on tty1, the username shown was not root. I dont understand how it could work one day, and then stop the next. Any ideas?
Anyway, I was fooling around with cat and found something out. If you type in:

cat > file1 <enter>
Ctrl-[ [ H (without spaces) <enter>
Ctrl-C <enter>
cat file1 <enter>

What happens is the cursor moves to a few lines below the top of the screen (nothing below it or _anywhere_ gets erased). Then you can just go about your business as normal from the cursors new position as if you had Insert on (or a cooler form of it). I have no idea if this (should i call it an escape character?) is a security related bug or not, but it could be a starting point for you elite uberhackers to jump off of. The man page for 'cat' and 'echo' sucks arse if you ask me.
-Ryan