Yuri interrogates Terzi for the wherabouts of Nia Lochlian, concerned about her since she went undercover to the prison planet with Celina and Pappas. If you don't choose to kill him, AND team up with Kalymnos later in the game, Terzi not only becomes a better person, but you can recruit him to your team. All that said, you can still cut his arms and torture him, after all, he's standing between you and Nia. Terzi's fairly pragmatic for a pirate, but beneath that greedy, cowardly exterior, he is a true Zero-G Dog.
If you recruit him, he's not shabby at all in the Anti-ship arena. AS Genius, and a decent start to Artillery to boot.