Terminal flashes on empty backspace with Yosemite
That is called the visual bell, and by default it’s enabled when your sound is muted. To change that setting, go into Terminal > Preferences > Profiles > <your profile> > Advanced.
You can also run
echo $'\nset bell-style off' >> ~/.inputrc
to disable Readline's use of the bell (deleting on an empty line, tab-complete, etc.). You will need to restart your session for this change to take effect.