I've solved the second part of this request (cd'ing in the terminal updates the gui) by customizing my bashrc script. See this post for the script.

http://forum.cocoatech.com/showthread.php?t=3355

However, the first part of this request (navigating in the GUI continually updates the terminal working directory) is very important to me and to my knowledge can't be implemented with a bash script.

Oh yes, and please give us a stronger visual cue as to which pane is active.

I am voting for this because of #3. If there is no way to switch between the panes with the keyboard, then this feature is useless to me. Also, there needs to be a way to switch between the panes and the bottom drop-down drawer for the terminal.