Terminal.app ignores ~/.profile file settings
Ok, what shell (bash, zsh, ...) are you using? Bash for instance reads .profile in absence of .bash_profile and .bash_login, though of you are NOT using bash as a login shell it will most likely go straight to .bashrc

A similar question was asked on this forum before, and pjmorse added this link:

http://hayne.net/MacDev/Notes/unixFAQ.html#shellStartup

which describes what files are read, and in what order, by a shell in OSX.