Do the following:
1) ls -l /system/bin/
Do you see busybox listed? on mine, busybox is a symlink (shortcut) to /system/xbin/busybox. It's denoted by a "->"
2) ls -l /system/xbin/
Same as above. Do you see busybox here? All of the busybox terminal programs will be symlinks to busybox as well (e.g. grep -> busybox). If you see none of that, titanium backup must have installed it somewhere else. I'll see if I can find any info on that. Presumably, you could just fix it by installing the market version, but I'm not sure what would happen if you already had it installed elsewhere. Obviously, make a nandroid backup before trying that.
EDIT: Okay, I did a little research, and it seems that titanium backup uses it's own version of busybox (stored somewhere; I didn't install it this way, so I can't search, myself), but it will work with the market version (since I've done that in the past, I know). Unfortunately, the thread I found on it was pretty old, so I can't verify 100% that this is the case. Here's what you should do:
1) Make a nandroid backup
2) Install busybox from the market
3) Verify titanium backup didn't break
4) Open the terminal emulator and type "busybox" and see if it reports available commands this time
If you like, you can run the other commands I gave you to see what I was talking about.