I read, sounded interesting,so I tried it. This is on Mint 13 KDE. I opened terminal ( Konsole ), settings, appearance, highlited the color scheme I am using, and clicked edit. There is a slider for background transparency 0-100%. I moved it to 100%. I now have the terminal frame with a 100% transparent text window. It might look unique but I think it would be easier to miss a typo.
EDIT: I see what you want, took a minute. A transparent text window lets you see the the code to be typed right thru the terminal app. Yes, this is exactly what I have now. I dragged terminal around and whatever was under it showed thru, this forum, wallpaper, running Conky etc.
Maybe Konsole, used in KDE, is another version of Terminal? Maybe someone knows if it can easily be installed in Cinnamon or Mate?
i5 3570k, ASRock z77 Extreme 4, 8 Gb Ripjaws 1600, Antec 430w psu, HVR 1600 tv tuner, custom case- marble top, oak face. Carver & DCM Time Window sound system. Mint 14 KDE.