As of 10.5, Mac OS X ships with X11, as well as a few standard X applications (namely xterm, xman and xlogo).
You open an XTerm window by starting X (it's in /Applications/Utilities), and while it's active go to Applications/Terminal, or press cmd+n.
I have no experience with iTerm, but there are a few minor features not present in Apple's terminal, such as mouse support, which do happen to work in XTerm there.
Mac OS X also ships with OpenSSH, which can be started with ssh at the command line (from Terminal, iTerm, XTerm, whatever), which is pretty much the best SSH client.
sshon the command line. – Nifle May 17 '10 at 7:19