The Terminal window available in the Tools menu is not an operating system terminal. It provides the ability to interact directly with the Praxis LIVE hub and components. A useful debugging tool, it allows you to execute short scripts directly.
For example, try running the 03 audio gui example and open the terminal. Type /audio/filter.frequency into the terminal and click Run. The filter component will respond with its frequency setting. Now try typing /audio/filter.frequency 2000 and notice the sound change and the control panel sync to the new value.