If Terminal.app feels like plastic scissors, you can try iterm2. It beats the crap out of Terminal in terms of configurability. https://github.com/gnachman/iTerm2 http://iterm2.com/
And it's broken. Screen updates are way slower, and stream redirection plain doesn't work. Terminal app is pretty good.
> echo "derp" > foo.txt
That has nothing to do with iterm2 and everything to do with bash or whatever shell you are using, I think.
Might you be confusing iterm2 with iterm? Iterm2 is a completely separate piece of software than iterm, it's not the second version of the same one.