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Can mind war only target ICs, or can it target, say, a squad of Terminators? If so, can the Eldar player choose which model is affected by mind war, or is it the Space marine player's choice?

Mind war targets a specific model. It is one of the few means of the attacker picking out a target.

But, it is still a junk power and should be avoided (apart from use by Eldrad, if you have nothing else to cast).

The rules for mind war very clearly tell you the answer to both of your questions.

Ugh Mind War is annoying! There are other better powers in the Eldar arsenal, it's still cool to use though.

Thanks guys.