I think that for game balance purposes, I'd advocate allowing Terror Stars to mount defensive modules. Same with Ascension Starbases.Basically, things like Battle Stations, Overlord Armor, etc. should be allowed. They should be allowed some basic defense.
The only effective tactic that I've seen so far with Terror Stars is to send in some constructors (5 to each solar system) to a civilization that you wish to go to war with. Put them right beside each star. Build them into Terror Stars (you'll need a fair amount of cash to do this). If you don't have the cash to do this, do this to the most important systems (the home system, and any other planets with a high PQ unless you intend to capture said planet, in which case, don't do this). Declare war or do so by blowing up stars. Enjoy the show.
You'll have to rush in defense ships to defend your Terror stars afterwards, unless of course you've sent them on a suicide mission. Either way, if you destroy a lot of solar systems, you may have fatally crippled said target civilization. On the downside, other civilizations seem to look down on what you just did. You may suffer a diplomacy penalty for the rest of the game (but then again, if you're doing what I said, you're probably pursuing a conquest victory anyways).