1. Minimal latency from keyboard to screen.
2. As others have mentioned here, awareness of line wrap, so that cut and paste work correctly at all times. Not just for raw output from a command. Editors too should communicate with the terminal to indicate that it is wrapping lines.
3. 24-bit color.
4. Apps (shells, editors) can query and set the window icon as well as the window title.
5. Integrated graphics display. So that I can just 'cat' a picture to display it in the terminal window, instead of using an external application.