Can you pause Terraria?

You can Alt-Tab out of the window, or simply click out of it if playing in windowed mode, and it will pause gameplay. It's hackish, but it does pause (you can also do this during loading, and it will keep loading).

As James has pointed out, this is single-player only. There is currently (and I doubt there ever will be) no multiplayer pause.

Game pauses automatically if you ALT+TAB to another program.

UPDATE: In Terraria 1.0.4 devs added the following option related to pausing:

• Added an option that will pause the game while talking to an NPC or opening your inventory in single player. It defaults to off.