PPS: the short answer was, you can turn a A tag to display "block" mode, and add any padding, and that padding will catch the clicks. Floating the element (float:left, float:right) is an implicit "display:block". An "inline" element (such as SPAN) also uses padding to determine the area which gets the background image; but without affecting the layout.
The simplest way to do it would be something like this:
ul.tabs, ul.tabs li { float:left; margin:0; padding:0; list-style:none; }
ul.tabs li a { float:left; padding:4px 10px 4px; border:1px solid blue; border-bottom:none; margin-right:4px; }
.clear { clear:both; /* add width:100%; overflow:hidden; for IE6 pos */ }
<ul class="tabs">
<li><a href="#">Lorem</a></li>
<li><a href="#">Ipsum</a></li>
...etc...
</ul>
<div class="clear"></div>
If you use the same width for each tab (depending on longest text in it), then you can even use a single gif background image:
ul.tabs li a { /* same above + */ background:url(tab-bg.gif) no-repeat 50% 0; text-align:center; width:120px; }
The more advanced, classic way of doing tabs that adapt to varying font sizes and can use custom imags for the corners and filling is "Sliding Doors" :
http://www.alistapart.com/articles/slidingdoors/