iTerm2 is a full featured terminal emulation program written for OS X using Cocoa. It has a native Apple look and feel in the program's interface, and there has always been an emphasis on providing complete international support.
A few months back, there was an unofficial fork that has incorporated needed patches from the SF bug tracker and also improvements submitted by the community. The page has an official site on sites.google.com and maintains an active mailing list. Since the latest alpha, 0.10, can be fairly buggy, I wanted to mention the fork because many issues have been fixed. You can download the most recent build from here.
This is a fork of the older iTerm project hosted on Sourceforge. I am not an official developer and have only submitted hints/suggestions along the way so far.
[crarko adds: iTerm has been a popular replacement for Terminal.app for a long time. I think the usage has dropped since the arrival of and improvements in Snow Leopard, but it's great that the project is still moving forward and certainly deserves a look if you haven't tried it before.]

