And it's broken. Screen updates are way slower, and stream redirection plain doesn't work. Terminal app is pretty good.

This is odd, for me there is no lag on Lion when I hold down the backspace key. And what do you mean by stream redirection? That usually means this:

> echo "derp" > foo.txt

That has nothing to do with iterm2 and everything to do with bash or whatever shell you are using, I think.

Might you be confusing iterm2 with iterm? Iterm2 is a completely separate piece of software than iterm, it's not the second version of the same one.

I mean things like 2>&1 or 2>/dev/null (redirecting error stream to stdout etc). This did not work for me last time I tried it. This coupled with significant lag when scrolling/listing huge dir, typing made me quickly abandon it. Terminal app does everything I really need and it's fast and reliable.

These things have nothing to do with the terminal emulator you're using and everything to do with your shell.

  > I mean things like 2>&1 or 2>/dev/null
  > (redirecting error stream to stdout etc)

These things are usually handled by the shell...

Sure, but if I execute a command like

    `sudo find / -ctime 0 2>/dev/null` 

in both iTerm and Terminal side by side, I would expect them both to print out the same thing, but that was not the case.

cat a big logfile on iTerm, cat a big logfile in terminal.

Then for some really screaming performance, cat a big logfile in xterm. Then, for insane performance cat a big logfile in mrxvt or rxvt.

Anti aliasing really slows things down, so performance is faster in the "native" terminal apps when that turned off, but with x11, theres way less than millisecond delays for printing stuff on the screen. I do like my terminal to be fast.

I thought I was the only one that witnessed slower screen updates. I don't know if it's the same thing, but for example, holding backspace to delete a few characters seems to lag (on an SSD with 2600k @ 4.5ghz and 8GB DDR3). I know I can just do C-u, but the lag is irritating nonetheless. Not to mention I actually like Terminal.app so I don't have a problem continuing to use it.

The original versions of iTerm gave me this problem, but since it was forked and called iTerm 2 I have never, ever had this problem. Are you using the newest version?

This sounds more like the original iTerm than the newer iTerm2 to me. They're separate projects.