I wasn't able to do that with bash. Not at the computer now though so I can't try it again to see if I had screwed it up.

Update: Back at the computer now, and I cannot replicate it with bash:

    rascul@smarts:~/mm> cat > foo
    fred
    barney
    wilma
    betty
    rascul@smarts:~/mm> < foo > bar
    rascul@smarts:~/mm> cat bar
    rascul@smarts:~/mm>

I'm curious what shell you did that with.