The author talked to the Cathode developer and even opened a feature request for iTerm2[1]. There seems to be some interest in this. Cathode is mostly about emulating old, slow hardware, this would be about the opposite (code wouldn't look too differently, though). A "movie hacker" terminal or editor for live coding would be pretty interesting. Hmm, maybe in addition to Xt/Gtk/OSX one could add an OpenGL interface to Emacs for maximum scriptability.
http://www.secretgeometry.com/apps/cathode/