>> Isn't the definition of terminal velocity when the drag forces cancel out 
>> any propulsion/gravity forces, thus giving zero acceleration?
>
> Zero acceleration for the falling object, perhaps. The device supporting 
> the portals would continue to accelerate, I think.

You would need to fix the device while the internal falling object built up 
speed (otherwise both would just fall like a person in an elevator).

After you release the device it will accelerate faster than gravity for a 
while until the internal object stops moving relative to the device.  After 
that point the device will just be falling under gravity with the internal 
object stopped (relative to the device).

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