change the terms and conditions check box

In the workflow check out it says
"Please accept the terms and conditions before proceeding"
with a check box

I would like to have a text box with the user initials that they have read the terms and conditions.

How can I accomplish this?

You could create a custom field of the table "order" via the menu Display->Custom fields (Business edition) and add the fields view just after the T&C view in your checkout workflow option of the configuration.
That would allow your users to enter their initials during the checkout.
Then, you might want to remove the T&C view from the checkout workflow in order to not have the checkbox anymore.