Tabs versus windows is one of those eternal debates (well, now that we can have the debate at all). For a long time I was strongly on the window side, to the point where I didn't use tabs in Firefox at all, but I've recently relented a bit on my dislike.

For me, the core difference between the two is that windows can overlap, can be moved independently, and can be organized freely (in two dimensions). Tabs are inherently non-overlapping, and thus for me they only work for things where I only ever want to see one of a number of things and do not want to organize the things separately.

(I make heavy use of icon and window positions for organizing my desktop and keeping track of what is what and how things relate to each other.)

Similarly, it's easy to see the appeal of tabs to someone who runs all of their applications maximized; tabs are lighter weight and enable useful features, and such people don't use overlapping windows anyways. I also feel that separate windows are less useful and more annoying if you're using a window manager that auto-places new windows, because then new tabs are more predictable and controllable than new windows.

Given that most people use auto-placing window managers and (judging from what I see around here) many of them almost always use maximized or near-maximized windows, I am not terribly surprised at the popularity of tabs.

Sidebar: an ideal harmonious world of tabs and windows

In my ideal world, tabs and windows cooperate: you can rip off any tab into a new window, and you can dock any window back into a tab (or a bunch of tabs, if the window is a multi-tab one). This would make it easy to use both, moving back and forth where I was mistaken about what I was going to be using something for.

Right now, my major tab-using application is Firefox. While there are Firefox extensions for better tab handling, I don't think any of them can do this particular set of tricks; the closest I've seen is one that will collapse all of your current Firefox windows into tabs in one window, which is violently not what I want.