Reply above quoted message
From MozillaZine Knowledge Base
When replying to messages, you may want your reply text to appear above (also known as top posting) or below the quoted text by default. This can be set differently for each account. Go to "Tools -> Account Settings", and then for the account you want to change select "Composition & Addressing". Using the drop-down list on the right, choose the reply position you want to use and click "OK". There is also an option to choose whether signature blocks should go at the very bottom of the message (the default), or directly beneath a top-posted response (above the quoted material). Note that if the signature is placed above a quoted message, the separator line ("-- ") is not used, as this would cause some mail clients to strip off everything below it upon replying.
The mail.identity.default.reply_on_top preference sets the default value for the reply text position for each account/identity. It defaults to 0, to have the reply at the bottom. You can use the Config Editor at Tools -> Options -> General to set it to 1 to have the reply on top.
Traditional netiquette (especially on Usenet and mailing lists) is to reply contextually beneath quoted material, trimming down the quotes to the minimum needed to establish context. Also known as inline, interspersed and interleaved posting, this does not always put your entire reply beneath all of the quoted material, because if you are replying to multiple paragraphs, each section of the reply would be beneath the quote of the paragraph to which it is responding. Some people prefer to start their cursor at the top of the message in order to facilitate moving down through the message and trimming the quotes before typing replies contextually. In this case, they would place the signature block at the very bottom of the message.
Changes with Thunderbird 24.0
Following frequent requests in forums and the choice of default in other mail clients, Thunderbird (but not SeaMonkey) will change the default behavior for new mail accounts to balance the different interests with its 24.0 release: