Rated 4 out of 5 stars

Good, but:

the ff3 version switches on the 'show tab bar always' option when pressing the button while just one tab is open. please fix.

This review is for a previous version of the add-on (0.3.8). 

When closing the last tab:

Update: Seems to have been fixed in FF 3.5.3

I see the behavior you're describing: FF3 ignores the "Hide the tab bar: When I have only one tab" option when closing the last tab in a window having set closeWindowWithLastTab to false. But Close Button doesn't change tab-bar-hiding at all. (Look in Tools >Options > Tabs. You'll see that it hasn't changed.) In fact, Ctrl+W (Close Tab) has the same behavior, so this seems to be a bug triggered by FF's removeCurrentTab function. Sorry.