[ xfce-Terminal version 0.4.2-1 -- http://www.archlinux.org/packages/extra/x86_64/terminal/ ]

Terminal cannot adjust the height of the window dynamically from a program executing inside the Terminal.

For example: 

Add the following line to your /home/user/.vimrc

set lines=50

Use vim to edit a file with more lines than can display in the window.

The Terminal window does not resize to 50 lines, and the display of the window will easily become corrupted as soon as you start splitting windows or navigating outside of the visible area.

The corruption inside of vim is expected, as :help lines points out if the terminal does not support changing the physical number of lines of the display, the display may be messed up.

gnome-terminal can dynamically resize the terminal window in this way, so it might be an easy switch to just enable something from from vte.