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No terminal colors in Ubuntu Server 12.04

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http://askubuntu.com – I've tried everything from this duplicate question but I still can't get it to work. The only difference from that question is that when I run env | grep TERM I get TERM=xterm instead of TERM=xterm-color. I dont think it matters though, they seem to be pretty interchangeable. What I don't understand however is that the only thing that has disappeared is the colors in the actual prompt. For example, if I run nano and it detects the syntax of the file, for example if it's a script, I get colors. Also when I run the env command mentioned earlier, the actual TERM text is red. So the colors are o (HowTos)