This was commited to CVS a few days ago.  However, there is some discussion on kde-cvs as to whether this should be configurable and default on/off.

CVS commit by jriddell: 

Make tabs automaticly resize when window is too small to show them all


  M +7 -0      konsole.cpp   1.503

Created attachment 9363 [details]
Configurable setAutoResize for tabs

Adds a 'Auto Resize Tabs' in the RMB of the 'new' button.  I'll update the Help
file and perhaps Tip file.

CVS commit by hindenburg: 

BUG: 77528
Allow user to set automatic resizing of tabs.


  M +18 -1     konsole.cpp   1.504
  M +2 -0      konsole.h   1.194


--- kdebase/konsole/konsole/konsole.cpp  #1.503:1.504
@@ -248,4 +248,5 @@ Konsole::Konsole(const char* name, int h
 ,m_tabViewMode(ShowIconAndText)
 ,b_dynamicTabHide(false)
+,b_autoResizeTabs(false)
 ,b_fullscreen(false)
 ,m_menuCreated(false)
@@ -837,4 +838,9 @@ void Konsole::makeGUI()
    dynamicTabHideOption->setChecked(b_dynamicTabHide);
    dynamicTabHideOption->plug(m_tabbarPopupMenu);
+
+   KToggleAction *m_autoResizeTabs = new KToggleAction( i18n("Auto Resize Tabs"),
+                 0, this, SLOT( slotToggleAutoResizeTabs() ), this);
+   m_autoResizeTabs->setChecked(b_autoResizeTabs);
+   m_autoResizeTabs->plug(m_tabbarPopupMenu);
  }
 
@@ -868,5 +874,6 @@ void Konsole::makeTabWidget()
   tabwidget = new KTabWidget(this);
   tabwidget->setTabReorderingEnabled(true);
-  tabwidget->setAutomaticResizeTabs(true);
+  tabwidget->setAutomaticResizeTabs( b_autoResizeTabs );
+
   if (n_tabbar==TabTop)
     tabwidget->setTabPosition(QTabWidget::Top);
@@ -1342,4 +1349,11 @@ void Konsole::slotTabSetViewOptions(int 
 }
 
+void Konsole::slotToggleAutoResizeTabs()
+{
+  b_autoResizeTabs = !b_autoResizeTabs;
+
+  tabwidget->setAutomaticResizeTabs( b_autoResizeTabs );
+}
+
 void Konsole::slotTabbarToggleDynamicHide()
 {
@@ -1444,4 +1458,5 @@ void Konsole::saveProperties(KConfig* co
   config->writeEntry("TabViewMode", int(m_tabViewMode));
   config->writeEntry("DynamicTabHide", b_dynamicTabHide);
+  config->writeEntry("AutoResizeTabs", b_autoResizeTabs);
 
   if (se) {
@@ -1571,4 +1586,5 @@ void Konsole::readProperties(KConfig* co
       m_tabViewMode = TabViewModes(config->readNumEntry("TabViewMode", ShowIconAndText));
       b_dynamicTabHide = config->readBoolEntry("DynamicTabHide", false);
+      b_autoResizeTabs = config->readBoolEntry("AutoResizeTabs", false);
    }
 
@@ -1594,4 +1610,5 @@ void Konsole::applySettingsToGUI()
    }
    updateKeytabMenu();
+   tabwidget->setAutomaticResizeTabs( b_autoResizeTabs );
 }
 

--- kdebase/konsole/konsole/konsole.h  #1.193:1.194
@@ -234,4 +234,5 @@ private slots:
   void slotTabSetViewOptions(int);
   void slotTabbarToggleDynamicHide();
+  void slotToggleAutoResizeTabs();
 
   void slotSetEncoding();
@@ -387,4 +388,5 @@ private:
   TabViewModes m_tabViewMode;
   bool        b_dynamicTabHide;
+  bool        b_autoResizeTabs;
 
   bool        b_framevis:1;

I think additionally autoresizing should be turned off when selecting icon only-mode (see 'minimumTabWidth problem' posting on kde-cvs).

Yes, it is ugly with IconOnly and autoresizing on.  It shouldn't be too hard to set autoresizing off when IconOnly selected.  However, the user can still do this themselves.

You think the user will get the connection? Apparently even developers have problems with that. :-)