So it turns out you can have the best of both worlds. I have been using ITerm for a while because it allows me to rename its tabs. Chad just turned me on to a hack that makes the same thing possible with Terminal.app:
1. Install SIMBL: http://www.culater.net/software/SIMBL/SIMBL.php
2. Install TabNamer.Bundle: http://ericanderson.us/2008/03/02/terminalapp-tab-namer-v01-alpha/
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