I am not sure if I understand you right, but for a similar problem I used this little snippet for XEmacs: 

;; stop ^M from appearing in shell window
(add-hook 'comint-output-filter-functions 'shell-strip-ctrl-m nil t)

[download]

Christian Lemburg
Brainbench MVP for Perl
http://www.brainbench.com

In reply to Re: problem: emacs interactive shell and cpan by clemburg
in thread problem: emacs interactive shell and cpan by stefp

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