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PuTTY allows bold text to be displayed by either emboldening the font, or by changing the colour of the text.
xterm allows these two options to be configured independently, so you can have both at once if you want it. Some users have highly xterm-specific application configurations which depend on this to look sensible.
It would be trivially easy to replace PuTTY's single checkbox with a pair of checkboxes, allowing bold-as-colour and bold-as-font to be selected in any combination. If we do that then we should probably warn the user if they disable both at once, though it's not clear what form that warning should take (a message box is probably overkill for what's basically a cosmetic issue).
Debian bug 167785 would appear to be an instance of this problem.
Patch (unreviewed, incomplete): Debian bug 193352
SGT, 2012-06-09: Now implemented on trunk.