I still use over terminal.app. Why? Two reasons: 1) iterm had tabs before terminal, so I got used to it and it's shortcuts, 2) ability to set "characters considered part of word" in mouse preferences. This allows double clicking on a path or url and getting the whole thing all at once. Sounds like a little thing, but it is one of those little things that makes life so much easier.

I don't understand the transparency issues, perhaps that was with an earlier version. I like being able to turn transparency on and off command-U (or setting a bookmark with always off). More convenient than terminal.app, IMO.