bug#6535: 24.0.50; grep seems not to work

[root]

The real problem is that in lisp/grep.el there is
(defun grep-process-setup ()
...
    ;; Any TERM except "dumb" allows GNU grep to use `--color=auto'
    (setenv "TERM" "emacs-grep")
    (setenv "GREP_OPTIONS"
            (concat (getenv "GREP_OPTIONS")
                    " --color=" (if (eq grep-highlight-matches 'always)
                                    "always" "auto")))
...

but there is no terminal type emacs-grep so the process call fails to 
start before it gets to call /bin/grep or set TERM=vt100

So, what is this emacs-grep terminal type and how did it change from when 
it worked.

==John ff