Since maintaining the latin names for dinosaurs in D&D is one of my obsessions, I figure I'd reply.
The answer is that most people know what a diplodocus is. Not everyone knows what a phorusrhacoid (or a diatryma) is. That said, "terror bird" is in fact the real-world name for this type of creature, and is often used when speaking of them as a group. More to the point, when they were statted up in the Fiend Folio, that's the name they were given. I personally came VERY close to actually calling them diatrymas (or even axe beaks), but in the end decided to keep them terror birds. Mostly because the author's a big fan of the name, and partially because it IS a pretty cool name for the monsters.
Since James brings up axe beak, I'm even further confused. That would seem to indicate that phororhacos = axe beak = terror bird. Comparing the 3E axebeak to the terror bird shows quite different creatures.
I'm no dinosaur expert, so I'll defer to the wisdom of the many folks around these parts who are dino experts.
From that description, it sounds to me as if "terror bird" is a real world name for the group of flightless birds which includes phorusrhacoids/diatrymas/axe beaks and possibly similar (equivalent?) creatures like the phororhacos. I also get the impression that the terror bird in the Fiend Folio isn't specifically a conversion of any of the earlier creatures, but simply a 3rd edition envisaging of a generic predatory flightless bird.
But I also have no ranks in Knowledge (Prehistoric Creatures), so I'm curious to hear from an expert .
It has, but not since 1985, in Dragon #96, when some guy named Ed Greenwood wrote "The Ecology of the Gulgrutha", covering both the ordinary and neo variety of dung eaters. I think the otyugh is prime material for a 3.5 ecology article.