I recently upgraded to Lion only to find that Terminal.app (and iTerm2, which I actually use instead) have totally lost all colors. This means no syntax highlighting in Vim, no colored directory names or filenames, no nothing. I've tried playing around with the terminal-type option in the preferences (for both apps), changing it to
xterm, etc. but all to no avail.
However! When I SSH into a remote machine in Terminal.app, I get colors! Everything works as it once did. Although this isn't the same with iTerm2, where I'm still left colourless.