Clicking on Settings will allow you to see the available themes. Terminal ships with several nice themes including basic, grass, homebrew, novel, ocean, pro, and red sands. In addition to using these, you can create your own by clicking the "+" button at the bottom.
You can tweak a theme by clicking the theme and using the options in either the "Text" or "Window" tabs. You can change the font style/size, text color, type of cursor, color of cursor, etc. When you are ready to make the these your default, just click the default button at the bottom of the theme list. Now all of your Terminal windows will load with the settings you specified.
Want more tips and tricks like this? Visit TUAW's Mac 101 and Terminal Tips sections.