Unexpected find-file behavior in Version 22.3 for Windows

[Count Dracula <Levent.Kitis@navy.mil>]

Under Linux, if find-file is invoked while the cursor is in a buffer
called
  /opt/foo/bar/textfile.txt
the text offered for completion in the minibuffer area is
  /opt/foo/bar/
but in a newly installed Windows (Vista Home) version 22.3, the
minibuffer area always shows the home directory ~/. This is strange
and annoying. How can I get find-file to behave as in the Linux
version?

Also in cc-mode in the Windows version 22.3, the line indentation
function is bound to
C-c C-q and this works fine, but I would like to bind it to the tab
key. The C-d key is also bound to some function or other, and I need
it to be bound to delete-region.
I thought I could make these changes in the c-mode-hook function, but
what I tried was apparently not the way to do it. Could someone post
the lisp code I need for these changes?

A long-standing problem under Linux has been the shell buffer (or
terminal). If I run man in the shell buffer, I get a message that says
that the terminal is not fully functional. If I run gcc, its messages
contain what look like octal codes.
If I run ls, the filenames I get are surrounded by spurious
characters, mostly square brackets and carets. What does it take to
set up a fully functional terminal?

Thanks,
Levent