I'm wondering what's your screen resolution? I'm using it on 1920x1080 + 1600x1440 dual screen. To me, the ability of iTerm2 to vertically and horizontally split multiple terminals fullscreen on a big monitor is a huge plus.
And for a lone time, Terminal.app before Lion only supports 16 colors, which is a big reason for me to switch to someone better. iTerm2 fits the bill.
I don't like splitting terminal windows - I use the tabs built into terminal.app and sizeup (http://irradiatedsoftware.com/sizeup/) to split/stack essentially "tab groups". I normally have multiple spaces, each with 50% of the horizontal screen dedicated to vim, and the other 50% to two groups of terminals (each one taking 50% of the vertical).
I'm not running dual screen - just 1900x1200 and 1440x900 depending on where I am. Like I said, it's a workflow thing. I didn't even notice the increase in terminal colors - all my good coloring is in mac vim, not in the terminal.
And for a lone time, Terminal.app before Lion only supports 16 colors, which is a big reason for me to switch to someone better. iTerm2 fits the bill.