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Whilst it wont solve it, is anything else in the works? Only, the OP is correct. If you hover over the first item, its only about 100px from the top of the page. What happens if (for some reason) a site doesn't use a header? Does it go off the page, or is it relocated to a side or at the bottom?
Design wise, I cant see the need to change it however.
I think the Dynamic plugin will solve it ( no ?) since it will automatically position the tooltip top or bottom depending on the position of the hovered item.
No, we can't use the positioning provided by Dynamic, because of the changing size of the tooltip as the content is loaded, which means that we need to use a bottom position rather than top, which jQuery Tools does not support. We have had to completely override jQuery Tools to position the thread preview tooltip.