I added a new ubuntu user with this command
useradd -d /home/newname -m newname
It seems no tab completing feature and only $ as prompt, When I logged in as root I see root@server$ as prompt.
Something is missing for my new user?
sounds like your user was added with the sh shell instead of bash try the following.
su to your new user and type
Thats odd. All this should be in your .bashrc and bash profiles I believe. That should have been populated by /etc/skel. All this leads me to think there's a deeper issue with your install.