Ironically, I would say customizability ends up being pretty important for serious developers attempting to avoid working. I can't say my terminal itself—as opposed to the shell—requires any serious modifications at all. (I rewire the left option key and color schemes, and that's about it.)
- Both let you set the cursor color, but Terminal doesn't let you set the cursor text color, which is a small annoyance.
- Terminal's full-screen goes into a separate desktop, but iTerm2 lets you disable Lion-style full-screen - another small annoyance.
- The only real deal-breaker for me was that I couldn't get Ctrl-/ working for Terminal (it's what I use for "undo" in emacs and readline).
Even with these things, I tried for a while to get Terminal set up - the faster refresh rate makes it look _really_ smooth compared to iTerm2.
Edit: I tried the beta. It's faster than .app. I'll give it that.
It seems to resolve paths relative to the working directory and passes them to `open`. It works for URLs too.