Did you check "Yes" to "Terrorist"?

The BBC covered the US visa waiver program, which includes a form that asks about prior involvement with terror activities:

A Homeland Security spokesman said the new registrations would require the same information as the I-94 card, which is currently filled out by visitors to the US and turned in to customs on arrival in the country.

That information includes passport number, country of residence, and any involvement in terror activities.

This seems like a control that might cause more mistakes than benefits, or which could lead to interesting information based exploits. Of course, many forms ask for criminal record, so perhaps being involved in terror activities will also become a common checkbox on government forms. After all, screeners are identifying shirts with guns on them and jewelry in the form of guns as prohibited items.

Does a mistake on this form enter you as a terrorist in a database? How would you remove such a mistake, or prove that it wasn't you? Worse, can others submit a form in your name with "yes" checked?