The reason why I am using xterm is two-fold:
At least on ppc, there is a bug in the in gnome-terminal (at least the virgin fc5 version) that causes oddities while editing a text file in vi. namely the characters are not always re-freshed correctly, causing display of the file contents to be incorrect.
Secondly, xterm is a much smaller screen footprint than gnome-terminal. gnome-terminal may have tabs, but you can only fit one standard size on a 1024x screen and see the entire terminal. With xterm, you can fit four. That allows one terminal to have a man page open while you are typing in another terminal, and you don't have to switch between tabs. You can view the man page while you are typing.
If they made gnome-terminal with a smaller screen footprint - then I might even use it myself.