It's hard to describe the behavior, but here's a short clip:
Basically, when entering multi-line commands, at the end of the first line, the insertion block goes back to the start of the first line, writes over the first line, then continues like normal on to the second, third, etc. lines. When deleting, it allows me to delete the whole command, plus the blank spaces on the line above the command (I have it setup so commands get inserted after a line containing user@host/Directory information. It then even allows me to delete the last part of the Directory and host I described above. Sorry I'm terrible at explaining this, the video will do a better job.
Here is the contents of my .bash_profile:
export PS1="\e[31m\u\e[0m@\e[34m\h\e[33m\w\n \$ \e[0m "