When comparing rxvt-unicode vs xterm, the Slant community recommends rxvt-unicode for most people. In the question“What are the best terminal emulators for UNIX-like systems?” rxvt-unicode is ranked 1st while xterm is ranked 13th. The most important reason people chose rxvt-unicode is:
Rxvt-unicode uses very little memory and takes a lightweight approach without losing many important functionalities. A single instance of urxvt takes about 6.5MB-8MB of RAM.
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Pros
Pro Low memory usage
Rxvt-unicode uses very little memory and takes a lightweight approach without losing many important functionalities. A single instance of urxvt takes about 6.5MB-8MB of RAM.
Pro Can be daemonized to reduce resource usage
For those who want to lower their system's resource usage, rxvt-unicode allows for daemonization. This way you can run several instances of urxvt inside a single process.
Pro Supports terminal transparency
Changing the transparency of the terminal is allowed for in rxvt-unicode. This not only makes for eye candy but is also good for GUI usability.
Pro Minimum dependencies and simple text config
Pro Supports multiple font types
Multiple font types can be displayed flawlessly in rxvt-unicode.
Pro Handles bold text colour properly
Displays characters with text attribute bold actually as bold glyphs.
Pro High performance
Rxvt-unicode is much faster than most alternatives.
Pro Unicode support
International language support is provided through Unicode.
Pro Proper wrapping support
During selection and pasting wrapped text doesn't break into lines at place of wrapping.
Pro Fast text rendering
Rxvt-unicode has very fast text rendering, being able to render hundreds of MB of text in a very short time.
Pro Built-in Perl interpreter
It has a built-in Perl interpreter, meaning that no install is needed. Simply run urxvtperl
.
Pro Lightweight
Xterm is a very lightweight terminal. It requires few resources, allowing it to run well even on lower-end machines.
Pro Used in almost every Linux distribution
If you master xterm, you won't have to learn another tty, since it is in almost every Linux distribution.
Pro Stable, well-tested
Pro Standard with X Window system
Xterm is installed as standard software with the X Window system, and is there even when installing other terminal emulators.
Pro Supports sixel images
Pro Shows full characters for wide fallback fonts
Many terminal emulators that deal with wider fallback fonts (i.e. double-wide characters in CJK fonts) truncate display of wide characters, show Unicode "missing glyph" characters, or simply fail to display the characters at all. XTerm is "smart" enough to simply take up the extra space needed to show such wide characters.
Pro In about 30 years, it had only one issue, and that was fixed quickly
Pro It is fast and responsive
See this.
Pro Many modern terminals emulate xterm
Many terminal applications, such as OS X's Terminal.app and iTerm2 (among others), all claim xterm or xterm- variants as their $TERM and aim for support of xterm's escape sequences. Many command-line applications will assume or even hard-code escape-sequences and behavior for xterm and those terminals emulating it.
Pro Configurable via Xresources
X Toolkit resources and xrdb predates what is currently called "theme". Although one needs to read man, mitigates most listed cons
Cons
Con Unicode characters that are too wide are blanked instead of clipped
If a character in a backup font is wider than the base font, urxvt substitutes the non-displayable character. A large letter space will show the wide characters, but the result is not reasonably spaced. There is a patch from 2014 that the urxvt maintainer will not merge.
Con Requires work to look acceptable
Out of the box, rxvt-unicode is not too pleasant to look at. Some understanding of Xresources is required for updating its appearance. That being said, the experience of customizing it can be very rewarding.
Con Requires work to configure useful functionality (clickable URL's, font scaling, tabs)
Con In daemon mode you can lose all your terminals
Because of sharing the same process terminal windows cannot be killed without sacrificing all other open windows. That becomes even more dangerous if you use multiple graphical managers without overriding socket with RXVT_SOCKET.
Con Unicode rendering is buggy
There are a few references to urxvt's buggy rendering, such as unicode combining characters, which bled through during scrolling.
Con Bloated
Exists because Xterm is complete trash. Although it has a lot of features, you will most likely never use them all.
Con No support yet for 24-bit "True Color"
Though this is still not available, you can download the patched version for 24bit, here.
Con Font size cannot be changed on the fly with the mousewheel
Sometimes you may need to enlarge the font to improve readability, or shrink it to have more real estate and "hawk's eye" view of data. In rxvt you need to change the configuration file or use these commands:
$ function fontsize
{printf '\33]50;%s%d\007' "xft:Dejavu Sans Mono:size=$1::antialias=false"}
$ fontsize 22
Con No option to have a "reverse color" cursor
While you can choose the color of the cursor and the character under the cursor, there's no automatic "reverse color" for the cursor. This makes it impossible to use rxvt-unicode if you have a light background terminal and a dark background editor.
Con No native transparency
Xterm does not natively support transparency (though it can be emulated if needs be).
Con Bad defaults
Very small default size. No way to know to how to configure size.
Con No tabs
Con It blinks
If it blinks for you too, you can try this: man xterm
and then press Shift+G.
Con Has few dependencies
Has dependencies like xbitmaps.
Con Historical source code
The stories behind terminal emulation beyond their classical representatives (of which xterm is simply the most long-lived) are somewhere inbetween subtly irritating to downright surreal.