Safe Terminal fixes a security weakness with Mac OS X Terminal utility, when it execute shell scripts without the user confirmation.
If Safari "Open safe files after download" is enabled, its possible to create malicious shell scripts that will be executed by the Terminal automatically after you download them. It is also possible to create malicious shell scripts that look like a document or a folder, that will be executed by Terminal on double click without warning.
After Safe Terminal is installed, the Terminal utility will show an alert before executing a shell script, allowing the user to confirm or cancel. The usage of the Terminal to type and run commands is not effected in any way.