Hi I still have this problem in 8.04.
It looks even worse than the screenshot the reporter showed.
I'm on Xubuntu with prop. Nvidia-drivers. But the problem was also there with 
free drivers.
It doesn't really matter which font I choose.

I do not know what the terminal-app is using for font-rendering (freetype, 
pango?)
it's also in the terminals of synaptic and other terminal-like screens.
I have libfreetype6 2.3.5-1ubuntu4 and libpango1.0-0 1.20.5-0ubuntu1 installed.

Hope this helps.

** Attachment added: "terminal screenshot.png"
   http://launchpadlibrarian.net/16701841/terminal%20screenshot.png

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XFCE Terminal Text Overlapping Problem
https://bugs.launchpad.net/bugs/179434
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