I just updated my ODIN install to the [link|ftp://ftp.os2.org/odin/weekly/|July 12th archive] and it fixed cut & paste and some other problems.
I found this in the changelog:
Key translation for arrow keys and insert/del, home/end, page up/down added (WM_CHAR message translation)
I suspect my problem was I always use INSERT and DELETE for doing copy, cut and paste. It is very likely that CTRL-X, CTRL-C and CTRL-V would have worked before.