Terminal issue

Hi there,
One of our users is having problems with the terminal.
When opened, a small (10x5) window opens and displays the red "traffic light' button and thats about it.

I've tried to fix this by the following:
* Tried changing the window layout (currently set to 10 columns and 5 rows or something rediculas) - made no diffrence
* Tried deleting the com.apple.terminal plist which holds the settings for the terminal
* Tried changing the font which terminal uses to arial and others, no change
* Tried 're-installing' terminal, removing it and replacing it with a known working copy.

Any ideas on what to do from here?
Thanks in advance.

Re-enable the font Monaco. You don't have to use it in Terminal, but it must be enabled in the system.