The new Leopard terminal doesn't allow setting the background image. This feature was supported in Tiger. The hack is to copy a .term file created on Tiger and use this on Leopard. Any customized terminal configuration created on Tiger should be found in /Users//Library/Application\ Support/Terminal/.term If a minimal .term file is used the other values will revert to defaults. Try this. Using a text editor such as vi, create the file new.txt with the following contents. Then double-click on the file in finder. A new terminal window should open using a background image. WindowSettings BackgroundImagePath /Library/Desktop Pictures/Ripples Blue.jpg Columns 80 Rows 25