I believe (at least on my redhat/bash prompt i just tried) that read sends the prompt test (e.g. 'Enter Foo') to STDERR ... Does Test::Expect look at STDERR or just STDOUT? I couldn't tell from a quick look at the docs.

To test this theory, i would try to change your silly program to be (note my use of bash -- i don't know redirecting syntax in ksh):

#!/bin/bash
read -r var1?"Enter foo " 2>&1   # is the read syntax here right for b
+ash??
echo $var1
[download]

Alternatively, the error_expect() method in Expect::Simple (what Test::Expect is build on) might be relevant, but not sure..