What is the difference between iTerm2 and Terminal?
There are several features listed on their features page.

Some of the features I like are:


Split pane view
Hotkey window for instant terminal anywhere
Search will highlight all found words (like in Chrome and Safari)
Mouseless copy
Instant replay (can "rewind" your session in case you forgot to note/copy something)
Paste history
Growl support for notification when a process completes