Davin has asked for ideas on how the project selection should work.
Here is my two cents worth:
I think you should select a project and work (on that project) using the tabs. The drop down list is ok-ish but here is an improvement.
Make the drop down list a panel (like the RSS drop down). This panel has elements which look like the expandable project blocks on the Home page. (Project name, Project summary, Change Log, Road Map, New Issue etc, perhaps even issues counts too)
That way you can get to a tab and a project in one click (anywhere in the system).
This new drop down list will probably be best in the header area above the tabs.
What do you think?