Thanks Apple. I'm one of those people who actually use keyboard autorepeat!
Open a Terminal session (from Launchpad of course..!) and test that autorepeat isn't working by holding down a key... See!? Bet you'd not even noticed that subtle change. Here's how to re-enable it on Lion. In your terminal session:
defaults write -g ApplePressAndHoldEnabled -bool false
That's it. No reboot or anything sinister like that.
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