Hi there!
Welcome to LinuxQuestions.org. You could give
aterm a shot. It's pretty nice and allows transparency. It's also very easy to compile. The image you've saw is probably an ordinary image in XPM format. You can create these images (or convert them into) with Gimp. I guess jpeg and png are also supported by aterm, but I've never tried. I'm more into transparency stuff only
There are other consoles which support that kind of stuff as eterm.
Good luck!