Heh, it's called Visor, from the makers of Quicksilver:
http://docs.blacktree.com/visor/visor
You can hack Terminal.app so it becomes a background app too, like Quicksilver/ActionGear:
http://www.macosxhints.com/article.php?story=200107011915182...
I also made it a "login item" to start on system start up. System prefs -> Accounts -> Login Items.
So now, I always have a command line prompt handy =P.
One side question: what is the terminal icon in your menubar? I must have that app (whatever it is).