It's a dropdown terminal, similar to Yakuake, but on OSX. It's fairly configurable. I can't find a way to make the dropdown bigger or smaller, it has fixed sizes such as full screen.
Most important thing: This is a hack/addon/replacement for Terminal. That is, it's hijacking Terminal and creating this behavior. You lose some normal Terminal behavior such as Windowed mode. I also can't seem to get colors back. So if that is against your wishes you might want to go somewhere else.