If you try to launch the terminal app, and it opens a window but then says "Process Completed" and won't let you do anything, it's probably a problem with your tcsh (shell) file.
You can use the default shell by picking "Run Command" under the "Shell" menu, and typing
/bin/shOnce that starts, "cd /bin," and "ls tcsh." If the file length is zero, you have a problem.
Mac OS X Hints
http://hints.macworld.com/article.php?story=20001105230337264