What is Terahertz?

MY NOTE: THE FOLLOWING INFORMATION, WAS COPIED FROM A VARIETY OF SOURCES, MOST NOTABLY WIKIPEDIA, AND SEVERAL COMPANY WEBPAGES, AND FUSED TOGETHER. (ALSO NOTE: This was first published in 2011-There have been many significant improvements and changes! Hence read the blog entries.)

Properties of Terahertz Waves
In physics, terahertz radiation refers to electromagnetic waves propagating at frequencies in the terahertz range. It is synonymously termed submillimeter radiation, terahertz waves, terahertz light, T-rays, T-light, T-lux and THz. The term typically applies to electromagnetic radiation with frequencies between high-frequency edge of the microwave band, 300 gigahertz (3×1011 Hz), and the long-wavelength edge of far-infrared light, 3000 GHz (3×1012 Hz or 3 THz). In wavelengths, this range corresponds to 0.1 mm (or 100 μm) infrared to 1.0 mm microwave. The THz band straddles the region where electromagnetic physics can best be described by its wave-like characteristics (microwave) and its particle-like characteristics (infrared).

Transmissivity similar to radio wave
Terahertz waves can be transmitted through various types of materials including paper, plastics, ceramics, wood, and textiles. Terahertz waves enable non-destructive analysis of hidden internal substances and are expected to lead to the development of novel methods of non-destructive analysis.
Directivity similar to light wave
Terahertz waves have directivity similar to laser light. Because the wavelengths of terahertz waves are measured in tens and hundreds of micrometers, terahertz waves can produce images with resolution similar to that of images viewed with the human eye under visible light, when the waves are detected in two or three dimensions after being transmitted through or reflected by the target object. In fact, terahertz waves can be transmitted through materials such as plastic and wood to enable analysis of their internal structure.
Identification of chemical substances
All materials consist of atoms and molecules joined by chemical bonds. When exposed to electromagnetic radiation of certain wavelengths, these chemical bonds each vibrate at a characteristic frequency. Information on these bonds enable the chemical composition of the substance, impurities, and other properties to be identified. By comparison with a known spectrum, differences between pharmaceutical products such as tablets can be analyzed non-destructively.
Safety of terahertz radiation
In contrast to X-ray radiation, terahertz radiation is non-ionizing and therefore safe for humans.
Hence, a decisive advantage of THz radiation as compared to x-rays is that it is safe. X-rays are ionizing and therefore poses significant health risks. THz exhibits an extremely low photon energy so that there is no danger that chemical bonds are broken up and that the examined material is changed. Also, the emitted power is very low leading to insignificant heating.
Therefore, THz radiation can principally be used close to humans.

Terahertz radiation, is part of your daily world already. You can’t escape exposure to it.  Both mid-infrared and terahertz radiations are ubiquitous since they are significant part of blackbody radiation from any objects (including human bodies and cars etc.) around room temperature. http://academic.brooklyn.cuny.edu/physics/chen/

You receive much more artificial THz exposure from the light-bulb in your 
house, or from other warm objects in the ambient environment, than from the
weak exposure for a short period of time from current THz scanners,

Potential Applications of Terahertz Waves

Non-destructive analysis of materials such as plastics and ceramics
Analysis in pharmaceutical research and inspection on pharmaceutical manufacturing lines
Security inspections of sealed packages and containers
Food and agricultural product quality monitoring
Biopsy of tissues such as skin

Medical imaging:
Terahertz radiation is non-ionizing, and thus is not expected to damage tissues and DNA, unlike X-rays. Some frequencies of terahertz radiation can penetrate several millimeters of tissue with low water content (e.g. fatty tissue) and reflect back. Terahertz radiation can also detect differences in water content and density of a tissue. Such methods could allow effective detection of epithelial cancer with a safer and less invasive or painful system using imaging.
Some frequencies of terahertz radiation can be used for 3D imaging of teeth and may be more accurate and safer than conventional X-ray imaging in dentistry.
Terahertz radiation can penetrate fabrics and plastics, so it can be used in surveillance, such as security screening, to uncover concealed weapons on a person, remotely. This is of particular interest because many materials of interest have unique spectral "fingerprints" in the terahertz range. This offers the possibility to combine spectral identification with imaging. Passive detection of Terahertz signatures avoid the bodily privacy concerns of other detection by being targeted to a very specific range of materials and objects.[5][6]
Scientific use and imaging:
Spectroscopy in terahertz radiation could provide novel information in chemistry and biochemistry.
Recently developed methods of THz time-domain spectroscopy (THz TDS) and THz tomography have been shown to be able to perform measurements on, and obtain images of, samples which are opaque in the visible and near-infrared regions of the spectrum. The utility of THz-TDS is limited when the sample is very thin, or has a low absorbance, since it is very difficult to distinguish changes in the THz pulse caused by the sample from those caused by long term fluctuations in the driving laser source or experiment. However, THz-TDS produces radiation that is both coherent and spectrally broad, so such images can contain far more information than a conventional image formed with a single-frequency source.
A primary use of submillimeter waves in physics is the study of condensed matter in high magnetic fields, since at high fields (over about 15 teslas), the Larmor frequencies are in the submillimeter band. Many high-magnetic field laboratories perform this work, such as the National High Magnetic Field Laboratory (NHMFL) in Florida.
Submillimetre astronomy.
Terahertz radiation could let art historians see murals hidden beneath coats of plaster or paint in centuries-old building, without harming the artwork.[7]
Potential uses exist in high-altitude telecommunications, above altitudes where water vapor causes signal absorption: aircraft to satellite, or satellite to satellite.
Many possible uses of terahertz sensing and imaging are proposed in manufacturing, quality control, and process monitoring. These generally exploit the traits of plastics and cardboard being transparent to terahertz radiation, making it possible to inspect packaged goods.

Despite many valuable useful applications, the adoption of terahertz waves has been slow because of the limited output power from currently available sources. Terahertz waves lie between the optical and the microwave spectrum and cannot be efficiently generated by either scaling down optical sources like lasers or scaling up conventional microwave sources such as klystrons. Current moderate size terahertz sources can only generate a few milliwatts of average power and hence most require expensive and complicated schemes for detection.