Should be pronounced with a silent ‘p’. Note also that in the UK the name Tracey (Sharon, too) is often used to generically refer to the kind of girl immortalised in the “dumb blonde” jokes, or Essex Girl jokes as they are known in the UK.
This annotation may also help explain why over on alt.fan.pratchett people regularly and affectionately refer to their Favourite Author as ‘Pterry’ (although the lazier participants usually just refer to him as TP, conforming to the sometimes bloody annoying Usenet habit of acronymising everything longer than two words or four characters, whichever comes first. Hence DW stands for Discworld, TCOM for The Colour of Magic, and APF for Annotated Pratchett File — but you already knew that).
I was later informed that ‘Pterry’ was also the name of a pterodactyl on a kids’ TV program called Jigsaw, but as far as I can recall Terry’s nickname was not coined with that in mind.