How can I copy on select in the OS X Terminal like PuTTY does?

In Terminal, select something and then within the same Terminal window do one of the following:

• click and drag the selection (a bit; the mouse pointer will change), and release to paste (hit Esc while dragging to cancel)

  

• or: paste using Shift-Command-V

• or: paste using the middle mouse button

Install SIMBL and then install TerminalCopyOnSelect.

• At first, you should install SIMBL.
• Download the zipped plugin file I mentioned above and expand it.
• Copy the extracted file "TerminalCopyOnSelect.bundle" to the plugin directory which is located at ~/Library/Application Support/SIMBL/Plugins/
• Terminate all processes of Terminal.app and restart it.

iTerm, an alternative to Terminal, can do this.