Well, I started working at a place where I was regularly juggling 2-4 SSH sessions, 2 programs running and dumping logs in other tabs, plus a few more open terminals, and after a coworker introduced me to the wonderful zsh[1], I wondered what other great tools I was missing. That's what led me to iTerm2.

I stuck with iTerm because of the many, many little features and conveniences that make working with the terminal easier.

Tabs can be put at the bottom of the screen, which solves that pesky issue where changing tabs on a fullscreened terminal.app causes the OSX topbar to slide down and intercept your click. Tab titles change color depending on the kind of activity that's going on within. Hotkey mapping is a lot more powerful, and lets you send arbitrary hex/escape codes with hotkeys. There's a drop-down mode, like Tilda or Visor. This might just be placebo, but I'm pretty sure it also glitches out less often than Terminal.app.

All in all, everything is just a little bit nicer than the stock terminal.

[1] officially http://zsh.sourceforge.net/, but you want http://ohmyz.sh/