This is an interesting article about using some of the new scripting features in Leopard’s Terminal to visually indicate which server you are logged into.

I tried using Terminal again in Leopard, but soon went back to iTerm. I use iTerm with a prompt of

export PS1="\[\e]1;\h\a\e]2;\h:\w\a\e[34;1m\]\W\$\[\e[0m\] "

which uses the server name as the tab name and puts the server and path of the current tab in the window title bar. I set the color of the prompt to blue (as above) on local machines and to red on servers.