Well, at least you can turn it off again.
In the modern version of
gnome-terminal, there is a hidden gconf setting that controls this if you don't want to turn off the Gnome-wide setting. Fire upgconf-editor, navigate to apps/gnome-terminal/profiles/Default, and set thecursor_blink_modekey to have the value of 'off'. If you have any other profiles, you will have to create and set this key in them as well.
