Just wanted to provide a little bit of context. This extension is NOT for everyone.
It fulfills a very specific purpose. I have found that I constantly have way too many tabs open. I often click new links to open new pages without closing out older tabs, and it was getting crazy. Somedays I would have 30-40 tabs open.
I wrote this extension so that I could keep a cap. You pick a maximum number of tabs an algorithm (least recently used, least accessed, or oldest) and as soon as you hit the cap it will discard an older tab.
It will never close a pinned tab or a tab that you have never been to (never been to means you haven't been actove on the page for more than 3 seconds)
The source is available on Github here: https://github.com/ccampbell/xtab