Apple - Inconsolata font does not work in Terminal

Try to clear and rebuild your font cache with the following:

sudo atsutil databases -remove
sudo atsutil server -shutdown
sudo atsutil server -ping

The above is "my standard answer" to font problems.

After your reply, I tried to download the font too. Installed it and in the Terminal.app got the same result as you. So +1 to the question - I'm interested too.

So,

• removed the otf version (does not work)
• I downloaded the ttf version from the Google Fonts Directory
• removed my cache as above
• installed the ttf version
• and works.

after it, for the test:

• removed the ttf version
• cleaned the cache
• installed the otf version
• does not work

so again for ttf - and have a working version in my Terminal.app

Haven't any idea why the otf version does not work. ;(

I can't reproduce your problem on my Mac (10.6.7). I downloaded the "OpenType file", opened it, installed it into Font Book, and configured Terminal to use it without incident. Maybe try deleting the font from your system and trying again?