I've implemented 256-color support (if XTerm is requested), and the scrollback can be set to any size though I am working on some other options to make it more flexible.

I haven't optimized for memory usage, but that's a good point. I did compare my launch state against Apple's Terminal using "top", and found that I used roughly the same real memory size but only 1/3 of the virtual memory. There could be many reasons for the difference of course.