I'm afraid I can't help much by actually doing any coding, since I don't know C. But I would be happy to help out in any way I can (testing and tweaking configurations) if someone wanted to try and "fix" vim to work in a normal shell. The gui-version works great but I just prefer to do my text-editing directly in the terminal I'm using, it's what I'm used to on other platforms!
But for now I have set the env-variable TERM to gui so it always opens the gui-variant.
I did try a few things like setting t_ku=^[0A (and \233A) and similiar tricks I found on the web but none of those made any difference from my testing, but I will continue to try and figure out a way to get the arrows working. The "size" of the window will probably need some updates in the code though, according to the docs it has worked on Amiga in the past (not so surprising since vim originated on the Amiga after all).
I understand the terminal part (I've never really used gvim before), and I agree, we should really have a fully working VIIM in a shell someday. About the help part; using, tweaking and giving feedback is very valuable.
- Plugin autoloading now works
- Reconfigured to make the MatchParen (and probably others) plugin work