Current version of Mobile Terminal for iPhone crashes on iOS 4. To resolve the problem, you can install Mobile Terminal 4.26 that works fine on iOS 4 / iOS 4.0.1. I tried this on iPhone 3GS and it works like charm. Here are step by step instructions:
Step 2: Download Mobile Terminal 4.26 (MobileTerminal-426.deb) to your desktop
Step 4: Copy the MobileTerminal-426.deb to /var/root/Media/Cydia/AutoInstall
If you can’t locate the “Cydia” folder in “Media”, create it. Then create another folder named “AutoInstall” in “Cydia” folder and copy the .deb file there.
Step 5: Reboot iPhone / iPad.
Once device reboot is complete, you should find Mobile Terminal on your SpringBoard. Run it and this time Mobile Terminal will not crash.
Note: After the reboot, if you can’t find Terminal app on your SpringBoard, reboot your device again, this should work now.
UPDATE: An update to Terminal is now available. Try Mobile Terminal 511-1 now.