When installing Tree Style Tab, there is no option to remove the horizontal tabs, but that can be done by adding following lines in the chrome/userChrome.css in your profile directory (type about:support in Firefox):

#TabsToolbar {
    visibility: collapse;
}

If the file does not exist, create it and put following line at the bottom (seems not to be required):

@namespace url("http://www.mozilla.org/keymaster/gatekeeper/there.is.only.xul");