Tabs should be above the address bar. Most the major browsers are starting to adopt this approach. It makes no logical sense for the address bar to be above the tabs as the address bar is related to the tab you are viewing and not the entire window. Therefore it should be contained within the tab.
Except you don't view two tabs at once, only a single tab is active. I like the positioning of the address bar in FF3. It shrank way too much in IE9. And darnit, I want search in a separate box