I return to this problem on a regular basis, and I usually find this answer when I am searching for the solution, so I figured I should add it here:
Another step that was missed, once you have installed Blender, is to go to the
/usr/share/applications folder and open the
blender* desktop file in a text editor, as root user (if it is updating from the PPA, it will append the svn version number to the application name).
I use the terminal to open
gksu gedit, but you could also use the key command Alt+F2, and enter the same command.
Change the preference
Terminal=False to read
Terminal=True, then save, and start blender, which should now open from a console/terminal window. The console will remain open, so long as blender is running (but blender will shut down if you exit the console).
This fix may only be necessary for 12.04, and does not apply to earlier versions which use the Alacarte menu system, which will allow you to add this preference with a radio button.