Open iTerm at a finder window's path

Modified from Deep-blue's version. I don't use tabs in shells, so this version always opens a new iTerm window.

Open ScriptEditor from Launchpad and paste this in:

(* 
	Open Terminal Here 
     
    	A toolbar script for Mac OS X 10.3/10.4
     
    	Written by Brian Schlining
	
	Modified by David Stark
 *)

property debug : false

-- when the toolbar script icon is clicked 
-- 
on run
	tell application "Finder"
		try
			set this_folder to (the target of the front window) as alias
		on error
			set this_folder to startup disk
		end try
		my process_item(this_folder)
	end tell
end run

-- This handler processes folders dropped onto the toolbar script icon 
-- 
on open these_items
	repeat with i from 1 to the count of these_items
		set this_item to item i of these_items
		my process_item(this_item)
	end repeat
end open

-- this subroutine processes does the actual work 
-- this version can handle this weirdo case: a folder named "te'st"ö te%s`t"

on process_item(this_item)
	set thePath to quoted form of POSIX path of this_item
	set theCmd to "cd " & thePath & ";clear;"
	if application "iTerm" is running then
		tell application "iTerm"
			activate
			set aWindow to (create window with default profile)
			tell current session of aWindow
				write text "cd " & thePath & ";clear;"
			end tell
		end tell
	else
		tell application "iTerm"
			activate
			set aWindow to current window
			tell current session of aWindow
				write text "cd " & thePath & ";clear;"
			end tell
		end tell
	end if
end process_item

Export it as an Application, then drag the application icon up to the Finder toolbar while holding down option and command.

Then you can click the icon in the Finder toolbar and iTerm will open at that folder.