A couple of things to check:
In iTerm2, in Preferences -> Profiles -> Terminal, under "Terminal Emulation" you have "Report Terminal Type:" set to xterm-256color.
In your .vimrc, there are some options you can also set to make sure it's using 256 colors:
set background=dark
" solarized options
let g:solarized_visibility = "high"
let g:solarized_contrast = "high"
colorscheme solarized
And one of those should work, but #1 first.
BUT, if you're using the default, built in vim on Snow Leopard, it won't work, as it's not built with support for 256 colors. I believe the built in version in Lion does.
Edit: Based on several comments on this answer, I've removed let g:solarized_termcolors = 256
line from the .vimrc
example above. It appears that could be a problem for some. Another says that adding the line let g:solarized_termcolors = 16
fixed a color display problem. Your own mileage may vary.
Second Edit: If you've loaded the solarized color palette into iTerm2, then you must let g:solarized_termcolors=16
. Only let g:solarized_termcolors=256
if you are not using the solarized palette as your iTerm2 color preset.
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