Right from the SQL*Plus manual
http://download.oracle.com/docs/cd/B19306_01/server.102/b14357/ch8.htm#sthref1597
SET TERMOUT
SET TERMOUT OFF suppresses the display so that you can spool output from a script without seeing it on the screen.
If both spooling to file and writing to terminal are not required, use SET TERMOUT OFF in >SQL scripts to disable terminal output.
SET TERMOUT is not supported in iSQL*Plus