Terminal font is buggy
Solution 1:
It looks like you have the new Ubuntu font set as your terminal font. This is not recommended, because the monospace version of the Ubuntu font has not yet been created.
To reset yourself to the default terminal font then run the following in a terminal:
gconftool-2 --unset /desktop/gnome/interface/monospace_font_name
You can also do this graphically, in System->Preferences->Appearance->Fonts. Here change the "Fixed width font" to 'Monospace' size 10. It will look something like this:
Solution 2:
Use a different font. The new Ubuntu font is not a monospace font, so it looks screwed up in the terminal (which expects monospace). I think Inconsolata is a great monospace font.