You can make terminal windows transparent by adjusting the opacity of the window background colour in Preferences – somewhere around 80% should work well. You can adjust the blurring level with the command:
defaults write com.apple.Terminal 'Blurminal Radius' -float 1.0
1.0 is the default – higher means more blur (you’ll need to restart Terminal.app for the changes to take effect).
I’m actually finding it very nice – it lets me use transparency without it getting in the way, but it’s there when you need it (say, to copy something from a browser window underneath).
Thanks to Alex Ross for the request, and the great name.
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