I agree with the general direction Q is going in....
Name doesn't really matter, but how you access it and what you can do in it is probably a better question.

Generally i feel it is is a development tool (Well, geeks play-thing) - there are some uses a normal user like myself may use it for, and that is probably debugging when i screw something up....

Other then that, i agree it is probably a system tool. - and putting it in system makes sense.
Not sure there is any need to get rid of the X, as the word terminal is still visible.

If i was told to use terminal (is there any difference in adding an X? - terminal on it's own makes me think of windows and terminal services...) And told where to go... thats enough for me