Showing current directory in Terminal's title, using tcsh
This is the prompt I use in tcsh.  It sets the window title to the full path (which as Chris Page answered, gains extra functionality in Lion).  The prompt itself is essentially [$HOST:$PWD] $USER% using tcsh % syntax.

set prompt = '%{\e]2;%~\a%}%S[%m:%c3] %n%#%s '