Updated to work with iTerm2 version v2.9 and above
Click the Application to open the current Finder folder in iTerm.
Drop a folder on to the Application icon to open that folder in iTerm.
Drag the app to the finder toolbar (may need hold the command key and possibly the option key). Then click anytime to open the current folder in iTerm. Alternatively, drag an drop a folder on the toobar icon to open the folder iTerm.