To customize the look of the command prompt for Terminal in Ubuntu you can insert code into .bashrc (if you are having trouble with updates in .bashrc not working you may want to see if it is set in .profile – thus overriding your .bashrc). Those files are found in your user directory /home/[username]

[bash]echo $PS1[/bash]

will show you the current settings. You can make a change directly from the command line but it will only work for that session. For example:

[bash]PS1="\d\w $ "[/bash]

This is the code I have in my .bashrc related to the terminal prompt

[bash]# set variable identifying the chroot you work in (used in the prompt below)
if [ -z "$debian_chroot" ] && [ -r /etc/debian_chroot ]; then
debian_chroot=$(cat /etc/debian_chroot)
fi

# set a fancy prompt (non-color, unless we know we "want" color)
case "$TERM" in
xterm-color) color_prompt=yes;;
esac

if [ -n "$force_color_prompt" ]; then
if [ -x /usr/bin/tput ] && tput setaf 1 >&/dev/null; then
color_prompt=yes
else
color_prompt=
fi
fi

if [ "$color_prompt" = yes ]; then
PS1=’${debian_chroot:+($debian_chroot)}\[\033[01;32m\]\u@\h\[\033[00m\]:\[\033[01;34m\]\w\[\033[00m\]\$ ‘
else
PS1=’${debian_chroot:+($debian_chroot)}\u@\h:\w\$ ‘
fi
unset color_prompt force_color_prompt[/bash]