" change cursor to block/ibeam when in normal/insert mode
if &term == 'xterm-256color' || &term == 'screen-256color'
    let &t_SI = "\<Esc>[5 q"
    let &t_EI = "\<Esc>[1 q"
endif

Also came across this snippet for changing cursor colors depending on modes:

if &term =~ "xterm\\|rxvt"
  " use an orange cursor in insert mode
  let &t_SI = "\<Esc>]12;orange\x7"
  " use a red cursor otherwise
  let &t_EI = "\<Esc>]12;red\x7"
  silent !echo -ne "\033]12;red\007"
  " reset cursor when vim exits
  autocmd VimLeave * silent !echo -ne "\033]112\007"
  " use \003]12;gray\007 for gnome-terminal and rxvt up to version 9.21
endif