I've been testing the Safari 4 beta, and I'm not sure I like it. The new tab bar does save space, but if you try to close a tab and even slightly move the mouse, it drags the window instead. It's frustrating to use and very un-Apple. It also leaks memory like a sieve, much more so than Firefox.
Up till the Safari beta came out, I'd been using Firefox 3.1b3 nightlies. I'll probably switch back once Mozilla releases FF 3.1b3 -- it fixes the rendering bugs in b2 and it's a lot more usable on a Mac than FF 3.0.