In fact, terrorized guards behave extremely predictably (as least, this is on the PC version). All terrorized guards behave essentially the same. They will alternate between looking left and right regularly (NOT erratically). They will slowly move along the entire platform they are on. If there's a ramp on the platform, they will walk on it when they backtrack (again, walking over all the ground available). On entering terrorized state, the guard will stumble backwards and fire shots in the direction he is facing/what scared him. Additionally, anything that would startle a normal guard (sounds, dead bodies, etc.) will cause the same reaction (stumbling and firing). This INCLUDES SEEING YOU. After a period of time, I've noticed that guards tend to stutter-step in one spot. Distracting him will "reset" him and cause him to come slowly investigate.
Terrorizing guards is crucial to getting high scores. You get +300 for terrorizing guards, and +600 for friendly kills (the max for kills, you can also get +600 from hangman's hymn, prowling spider, ninja tool kill and object kill).