I never really noticed too much of an issue with FF2, but I don't open and close many tabs anyway so maybe thats why.

As mentioned before the memory would be taken up with tabs open (the more tabs the more memory used) but when the tabs were closed the memory would still be tied up...with no real way to fix it. Not sure why its called a leak other than its the proper tech term for it. I always equated it with your brains falling out (morbid I know).