I was so thrilled with Mac OS X Leopard's new version of Terminal that I didn't notice an important missing feature: You can no longer customize the 16 ANSI colors. This is important because dark blue is practically unreadable on dark backgrounds. Someone has a hack that adds this feature back in, though it uses an Input Manager (bad voodoo), so it's not ideal.
I like that iTerm is a free open source competitor to Mac Terminal, but I've never been that fond of it as an application. Before Leopard, iTerm was simply the only alternative to Terminal's (previously) atrocious preferences panes and limited feature set. For better colors alone, however, I'm willing to reconsider. Like Terminal, iTerm has grown some in the past year or so. Custom ANSI colors have moved in a recent version: They're now under the Bookmarks menu, under Manage Profiles..., Display Profiles. Select the Default profile and brighten up that blue!
Seems like once again, my ideal Mac terminal program is somewhere between Terminal and iTerm. If I could brighten Terminal's blue with a plist file or something, I'd go back.