The Ubuntu 10.10 Maverick Meerkat Nautilus Elementary branch just got an embedded terminal of it's own (eterm).
So what's different from the Nautilus Terminal extension we posted a few days ago? Well, in Nautilus Elementary you can completely disable it - something you can't do in Nautilus Terminal (there is still a visible toolbar once you turn it off).
Also, the Nautilus Elementary terminal changes the working directory as you click your way through folders, just like in Nautilus Terminal, but Nautilus Elementary doesn't run a new session on each folder change so the terminal history isn't cleared.
There is one thing missing in the NE terminal though: it's not configurable for now.
The Nautilus Elementary embedded terminal can be toggled on/off using the F7 key or by going to View > Embed Terminal.
This feature is only available for the Nautilus Elementary in Maverick but if you're using an older Ubuntu version, you can still get an embedded terminal into Nautilus by using FLOZz's Nautilus Terminal!
Update: FLOZz will work on the terminal configuration part of Nautilus Elementary so it should have the same configuration options as Nautilus Terminal - see the comments below.