I found the new Terminal.app in Panther is now much better - to a point that I decided to drop iTerm and use the bundled Terminal instead. It is now much faster in scrolling, has to this "Connect to Server" feature that allows you to customise the application to be executed upon creating a new terminal. For example, running ssh to connect to a remote server.
Another great thing is to be able to customise the key binding. I have changed the [page down] and [page up] to send string ^[[6~ and ^[[5~, to properly emulate page down/page up keys in a xterm. My scroll up/down now becomes shift-page up and shift-page down - just like how it works in the xterm! Very happy now :)