iTerm is a third party replacement for the built-in Terminal application.
iTerm has several advantages over the built-in Terminal. These include
- Split pane view
- Hotkey window for instant terminal anywhere Search will highlight all
- found words (like in Chrome and Safari) Mouseless copy Instant replay
- (can "rewind" your session in case you forgot to note/copy something)
- Paste history Growl support for notification when a process completes
Related question: What is the difference between iTerm2 and Terminal?