<p>I know the combination <kbd>Ctrl</kbd>+<kbd>A</kbd> to jump to the beginning of the current command, and <kbd>Ctrl</kbd>+<kbd>E</kbd> to jump to the end. </p>

<p>But is there any way to jump word by word, like <kbd>Alt</kbd>+<kbd>&larr;</kbd>/<kbd>&rarr;</kbd> in Cocoa applications does?</p>

Here's how you can do it
By default, the Terminal has these shortcuts to move (left and right) word-by-word:
esc
+
B
(left)
esc
+
F
(right)
You can configure
alt
+
←
and
→
to generate those sequences for you:
Open Terminal preferences (
cmd
+
,
);
At Settings tab, select Keyboard and double-click
```
⌥ ←
```
if it's there, or add it if it's not.
Set the modifier as desired, and type the shortcut key in the box:
esc
+
B
, generating the text
```
\033b
```
(you can't type this text manually).
Repeat for word-right (
esc
+
F
becomes
```
\033f
```
)
Alternatively, you can refer to this blog post over at textmate:
http://blog.macromates.com/2006/word-movement-in-terminal/