Terminal uses the available fonts. If you select e.g. "Terminal" or "fixed" in the available bitmap sizes on the cairo or xlib backend, it will look exactly like xterm. Except if your backend hangs right on these fonts, it happens for me in cairo on x86-32bit, but it is some kind of compiler optimization problem.
I can't find all the available font in the Terminal.app font panel. For example I don't find "Fixed", which is the font used by emacs, and would be great.
Finally I ended up to ubuntu-mono 10pt, which looks a bit better, but not so much as the one used by Eterm (for example).
One nice feature would be the possibility to change the font of the current terminal, "live". This would be very usefull, very often to me!