Yes, I can confirm I'm also experiencing this problem with gnome-
terminal:

1. Open gnome-terminal (defaults to home directory). Title is: Terminal
2. cd Public    Title is now: u...@machinename: ~
3. cd ../           Title is now: u...@machinename: ~/Public

- so it's one step behind.

Similar issue with gedit and switching tabs between documents - always
one step behind. Switching to another window (Alt+Tab) and then back
updates the title.

-- 
Firefox title at top of windows sometimes does not show the right webpage name.
https://bugs.launchpad.net/bugs/662565
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