After I said that I wasn’t that bothered about transparency I found myself drawn towards this. I thought that the opaque text would make this more usable that plain transparency. I was packaging the Xfce4.4 beta, and compiled Terminal as part of this, and thought I’d add this hack to it. It worked OK, but you could only use a black terminal, and the alpha was hardcoded.
So I went out and found this which does the same thing for gnome-terminal, and so shares the backend with Terminal. I used the patch for libvte, and ported the changes to Terminal. It works quite well I think, and with Terminal’s ability to lose it’s own window decorations you could do some interesting things.
So, the obligatory screenshot. Looks pretty unusable I know, and it is like that, but I wanted to show what could be done if you wanted.