Best Practices for Naming Sites and Pages.
A comment I frequently hear is: SharePoint tabs don't always highlight properly. As it turns out, if you are in the habit of doing things a certain way, they always work.
First, make sure you are turning on "Show Pages" and/or "Show subsites". You can find this in Site Settings by clicking on Navigation.
Second, when you are adding sites and pages make sure their names don't have spaces. See my blog on best practices for working with column names for a deeper discussion; I generally extend this to everything I create in SharePoint by habit now and as it turns out why I never run into this problem.
Third, when adding pages or sites to your navigation, always browse to the intended destination; this will ensure your tabs will work properly. In fact if you compare the resulting URL after you fix a broken tab this way, you will see that the URL must be relative, not absolute.
Following these best practices should prevent the problem where SharePoint (MOSS or WSS) tabs are not highlighting.
-Joe