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Best practice on building tabs as main navigation for website.

I am building a prototype for a website whose main navigation is a series of tabs across the top. I understand that the Dynamic Panel is useful for creating tabs, but I am not sure how best to structure the content below the tabs. Your example of tabs in the tutorial assumes that it is one panel with tabs on one screen, not really the main navigation.

My question is on the best practice to do so. I see two options.
1) Create a Dynamic Panel for the tabs and place it on the template. Then put content on separate screens.
2) Create a Dynamic Panel for the tabs and put all the content in separate panels within Dynamic Panel.
I am leaning towards #1 as the content has its own dynamic panels and I am afraid that it will get really confusing, but maybe there is something that I am not thinking of.
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