I know you asked for windows, but...honestly... try running some Debian linux on the PC. Windows terminals are always fiddly broken junkware. I can't believe people ask money for this garbage.
You will have decent terminal built-in and a relatively maintenance-free tool chain for your python, avr-gcc, and other development tools. This stuff really comes in handy when you want to use avr-dude to program other microcontrollers besides the one sitting in your Ardiuino board. Unless you can't handle typing apt-get upgrade/update every once in a while.
Also, with linux you will have alternatives to massively bloated development tools like Processing and the Arduino IDE. (Three or four lines of a shell script calling awk/gnuplot can often do the same thing as pages and pages of Processing java bloat. (Specifically, I'm thinking of the mightohm geiger counter graphing program. Hell, with <10 lines of script you can even make you a histogram and watch the Poisson distribution grow as the counts trickle in.)) The point is, /dev/ttyUSB0 is just a file and awk/sed/bash/python/perl/gnuplot/octave or anything you are comfortable with can read/write to it. The boring terminal emulation is built-in and preinstalled. But the initial learning is pretty tough at first.
I tried Cygwin's X-term, MochaSoft's Telnet, and Console2 from SourceForge. But I haven't figured out how to connect them to the Com4 port that the cable driver comes up at. I guess these are really Telnet programs, and I need a Terminal Emulator.
Have you looked in the /dev directory for tty files in cygwin'? There should be a file ttyUSBsomething or tty.cuSomething representing your USB serial port. You should be able to log into your rPi by running something like:
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screen /dev/ttyUSB0 9600
in an xterm. But I hear you, cygwin is a pretty achy-breaky linux. You might have to apt-get install screen, if it is not preinstalled. (btw, screen can do a LOT more than just talk to a serial port.) In any case, better to dual boot and use the real thing than waste time fighting with perpetually broken emulation...or whatever cygwin is.
Nevertheless, you should be able to access the serial port from cygwin. Take a look at this:http://stackoverflow.com/questions/7918003/com-ports-dont-appear-in-cygwin