I really don't understand why tabs are generally considered a unique problem from the Windows taskbar, which has improved over time quite dramatically from when it used to behave quite similarly to Firefox and other browsers with a little scroll arrow to view overflow items to what we have now in Windows 7.
In general IE seems to be innovating the most in this realm recently. In IE8+, they've got dynamically colour-coded tabs which group tabs that were opened from one another:
It would seem to me that it would make sense to treat these dynamic tab groups (or something like them, like tabs that all share the same host) in the way that different applications are treated in the Windows taskbar, especially when the tabs overflow. In Windows 7, multiple windows from the same application group together. Clicking on a single group then pops up a list of the windows that it represents:
Image taken from the Engineering Windows 7 blog
Sadly even in IE8, even despite its tab grouping, the tabs overflow exactly as you describe above (as opposed to grouping/collapsing tab groups together):
Image taken from Chaks' Corner
In general the factors that come to mind as needing to be considered when dealing with tab overflow are:
- Spatial awareness
I think Chrome's solution suffers on point 1 but succeeds on point 2. I believe Firefox's solution is the best of a bad bunch based on these requirements. For reference (since you didn't include it), here's how Safari deals with this problem (the tabs listed in the darkened section of the drop-down are the ones that are entirely overflown):
Perhaps the most novel solution to this problem is that of IE9. While I notice you mentioned how IE9 handles this problem, it's worth pointing out that IE9 was designed to generally accommodate 5 or so tabs (that's a really interesting article for you to read if you're interested in this topic anyway).
Despite the backlash that it invoked in power users (who are used to using huge numbers of tabs), what this design does is encourage users to spread their tabs over multiple windows sooner (effectively removing the need to manage an extremely large number of tabs in a single window).
Edit: There are a bunch of nifty Firefox add-ons that present creative solutions to dealing with very large numbers of tabs, including providing the ability to toggle specific tabs to show only a favicon and thus take up less space, or to "fisheye" tabs like the OS X Dock, such that the tab beneath the mouse/with keyboard focus is shown at full width but it collapses proportionately when not.
In the OS X Dock, the entire Dock itself scales down proportionally to accommodate more items until individual items are minuscule. As described, it can then (optionally) magnify the items closer to the mouse:
Image taken from Control Your Mac