Update (2008/09/10): Giles Orr kindly pointed out that he is not the author of the bash prompt package I use, I have updated to give proper credit to the author, Raymond Page.
For some time I have used Raymond Page's bash prompt code (heavily based on the work by Giles Orr in the Bash Prompt HOWTO, you can get it at http://gentoo-wiki.com/TIP_Prompt_Magic or http://code.google.com/p/homenix/source/browse/, you need to get .prompt, .prompt_functions and .prompt_config from the trunk/ directory), which I like very much because it is highly customizable, and although a lot of the functions are Linux-specific, it can easily be made to work on Mac OS X. It features context-dependent prompt colorization (e.g. based on whether the current directory is writable and on the machine load), automatic shortening of the prompt based on window width, and many other features.