From MozillaZine Knowledge Base
In conjunction with several other improvements to tabbed browsing in Firefox 2.0, the behavior of closing tabs was changed. Previously, closing any tab would shift focus to the tab immediately to the right if possible; failing that, the tab to the left. Now, if a page that would normally have opened in a new window is opened in a tab and that tab is closed, focus is shifted to the tab that opened the window. This preference controls whether the old or new behavior is observed.
Possible values and their effects
If new windows are diverted into new tabs and a resulting tab is closed, shift focus back to the tab that opened it. (Default)
When any tab is closed, shift focus to the adjacent right tab if it exists; otherwise, to the adjacent left tab.
First checked in
Has an effect in