Terminal > Preferences
In the general tab, you can chose which profile is opened when you start terminal. You can set "Shells open with" to chose which directory terminal opens to, or specify a command to run each time you open a new terminal window or tab.
The profiles tab allows you to customize the look and feel of your terminal. It comes with a bunch of pre set themes, each of which can be customized further to your liking. Profiles includes sub tabs for changing settings like Text, Window, Tab, Shell, Keyboard, and Advanced.
Window groups are configurable layouts that are used to organized multiple terminal windows. To set a window group, use
Window > Save Windows as Group. This will allow you to save your current terminal layout as a "Window Group".
In the encodings tab, you can select which encodings you want to show up when choosing options in the text encoding menus. For most users, the default is fine here.