Like most of these utilities, you simply put the application in a folder (/Applications/Utilities, or ~/Applications, maybe) and then drag it to your Finder toolbar. The very first thing you'll notice is that it has an options menu; very few of the other apps in this category boast configurable options, so this is a bonus from the start. The options panel opens the first time you launch OpenTerminal, and is always accessible by holding the Option key when you click the icon.
One nice thing (and the first option you can set) is that it's a native app that can run in the background and always be ready for a quick transfer from GUI to terminal. It has a zero-memory footprint, so it's quite convenient to do so. Next, it has iTerm support, which I always preferred until the Snow Leopard Terminal came out. Some of you may still enjoy it more, so the option is there. You can also choose whether to use an existing window if available, or open a new window each time, and you can opt to open tabs instead of windows, if you prefer (I do).
You can choose to always cd to the folder of the current window, or cd to a selected folder when there's a selection. OpenTerminal also comes with a contextual menu plugin for opening the directory of a selected file or folder. There's even a built-in script you can link to that works in reverse, and opens the current Terminal directory in Finder.
Flipping over the the Shell pane in OpenTerminal's preferences, you can choose to use pushd instead of cd, which keeps a stack of your directories that you can drill back through using popd. It's like
cd - on steroids. You can also tell it what shell you're using, so you get properly-escaped folder names when you run it.
The icon it comes with is ugly and does not fit well into the Snow Leopard finder bar. That's no problem, though, there's an alternate icon in the zip file that does the trick nicely. You can swap it out using the age-old "Get Info, select icon, Command-C, Get Info, select icon, Command-V" technique.
It's exactly what I've been looking for since my recent clean install, after which I couldn't find the app I had originally been using for this. This one is better, and it's free. If you spend time flipping between Finder and Terminal, OpenTerminal is a great tool.