I've been struggling with the top link tabs for a customers WSS 3.0 site for some time now. Some of the tabs would be highlighted properly when selected and some would not - reverting to highlighting the first tab in the list when selected.
Searching for a solution to this yielded nothing of value (this is as close as I got) so I set out to try and figure out the logic behind it all.
It turns out that the reason some of the tabs didn't highlight properly was twofold;
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All links need to end with an actual web page. That is, you can not link to /sitename/listname/, you need to link to /sitename/listname/view.aspx.
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The link can not contain any spaces - not even if you subsitute them with %20.
After changing the faulty links so that they complied with the above guidelines they all highlighted properly when selected.
If you find this post helpful, please link to it so that it climbs up the ranks in Google - I had a hell of a time finding anything relating to this when searching.