Thats a terminal with a transparent background so you can see your wallpaper behind it. Although it's not true transparency, it just renders your wallpaper in the right place in the shell.
- this is mine.
I'm using aterm with this as the start command
aterm -name aterm -title 'FC4 Terminal -sl 3000 -sb -tr
You can google the various properties of aterm but this gives it 3000 lines of history, transparency etc etc.
to remove the title bar add a line in ~/.fluxbox/keys
MOD 1 T : ToggleDecor
This means that pressing alt (mod 1) (i use mod 4 which is the windows key) will hide/unhide the titlebar in the focused window.
Now i like my terminal to be there like that at startup so i put the start command in ~/.fluxbox/startup
and this in ~/.fluxbox/apps
This means that the titlebar is hidden everytime aterm starts, but to move it around you can alt-T to show the titlebar.