Apple - keyboard no longer repeats keys when held down

The accented character selection when a key is held was one of the tiny things that changed in Lion. To disable it, run this in the Terminal:

defaults write -g ApplePressAndHoldEnabled -bool false

I will admit, though, it is strange that there's a setting in System Preferences that only affects behavior accessed through a defaults write command.

As Kyle menitoned, this is a side effect of Lion's new accent feature.

If you have TinkerTool installed, you could easily enable or disable the feature as of version 10.7, which lets you:

Re-enable the key repeat feature