Hey, that's actually in version 2 as well! It frustrated me too, even made a checkout of the source to fix it myself, and then found that it's in the advanced o

Hey, that's actually in version 2 as well! It frustrated me too, even made a checkout of the source to fix it myself, and then found that it's in the advanced options. Go to preferences -> advanced and all the way to the bottom there is "Terminal windows resize smoothly.". Set that to yes, and it will resize to the edges of the screen.