http://iterm2.com/features.html
Split Panes
Divide a tab up into multiple panes, each one of which shows a different session. You can slice vertically and horizontally and create any number of panes in any imaginable arrangement.
Notice how inactive panes are slightly dimmed so it's easy to see which is active.
Hotkey Window
Register a hotkey that brings iTerm2 to the foreground when you're in another application. A terminal is always a keypress away. You can choose to have the hotkey open a dedicated window. This gives you an always-available terminal (like Visor, Guake, or Yakuake) at your fingertips.
Search
iTerm2 comes with a robust find-on-page feature. The UI stays out of the way. All matches are immediately highlighted. Even regular expression support is offered!
Autocomplete
Just type the start of any word that has ever appeared in your window and then Cmd-; will pop open a window with suggestions. The word you're looking for is usually on top of the list!
Mouseless Copy
Use the Find feature to begin searching for text. Press tab to expand the selection to the right or shift-tab to expand the selection to the left. Option-enter pastes the current match.
Paste History
Paste history lets you revisit recently copied or pasted text. You can even opt to have the history saved to disk so it will never be lost.
Instant Replay
Instant replay lets you travel back in time. It's like TiVo for your terminal!
Configurability
Map any key to any function. Assign separate functions to each option key--or even remap all the modifier keys. You can customize iTerm2's appearance to suit your needs: enable transparency, background blur, background images, and much more.
Unixyness
Coming from a Unix world? You'll feel at home with focus follows mouse, copy on select, middle button paste, and keyboard shortcuts to avoid mousing.
256 Colors
With 256-color mode, Vim explodes with photorealism: the terminal is a medley of color and code comes alive.
Readability
Do you lose your cursor when there are lots of different colors or have programs display hard-to-read color combinations? With the Smart Cursor Color and Minimum Contrast features, you can ensure that these problems are gone for good.
Mouse Reporting
You can use the mouse to position the cursor, highlight text, and perform other functions in programs like Vim and Emacs with the mouse reporting feature.
Growl Support
You can choose to receive Growl notifications of activity, bells, and more. Feel free to let a long job run in the background, secure in the knowledge that you'll know when it's done.
Exposé Tabs
Like OS X's Exposé feature, iTerm2 shows all your tabs on one screen. Better yet, you can search through them all at once. Go ahead and open as many tabs as you want--you can always find what you're looking for.
Tagged Profiles
Do you need to store separate configurations for many different hosts? iTerm2 provides a taggable and searchable profiles database so you can easily find the profile you're looking for.
Multi-Lingual
iTerm2 features excellent internationalization support, including support for Unicode combining marks, double-width characters, and all Unicode planes.
Triggers
iTerm2 supports user-defined triggers, which are actions that run when text matching a regular expression is received. You can use it to highlight words, automatically respond to prompts, notify you when something important happens, and more.
Smart Selection
iTerm2 can perform "smart selection" to highlight URLs, email addresses, filenames, and more by recognizing what is under the cursor and choosing how much text to select.