Using the SHIFT key in Terminal
Solution 1:
Seems to be a known bug - see here: https://bugs.launchpad.net/ubuntu/+source/vte/+bug/546021 and the upstream bug here https://bugzilla.gnome.org/show_bug.cgi?id=617646
Copy paste works with Ctrl-Shift-C and -V, respectively. Basically all relevant shortcuts you know from other Gnome applications can be applied in the terminal by adding an additional Shift- keypress... Ctrl-Shift-Q for quit, for example.
Solution 2:
screen
is a, well, it describes itself as a terminal multiplexer. It provides an enhanced terminal environment and includes a mechanism for text selection and copy/pasting using just keyboard. CTRL+[ lets you roam the buffer with a cursor. Press enter or space to start the selection, then again to finish the copy and exit roaming mode. CTRL+] pastes your selection.
Going this route (which I can't live without: GNU screen is one of the first things I install on any new computer), you find byobu
less intimidating. Screen is a beast to configure, byobu makes it look beautiful.
tmux
is another terminal multiplexer with similar functionality. Apparently it has a bunch of improvements over screen
, not least of which is a sane configuration file.