If we accept the wikipedia definition as mostly true, this is the first line of their entry "A tall tale is a story with unbelievable elements, related as if it were true and factual." Using this definition both the final story of this collection as well as Oil of Dog are tall tales.
By that definition, pretty much anything on Escape Pod or Podcastle are tall tales. That definition's too broad, more along the lines of "speculative fiction" rather than "tall tale"
but also an ongoing "upping the ante" of exaggeration as the story progresses that makes something a tall tale. Think Rudolf Erich Raspe's "The Surprising Adventures of Baron Munchausen" or Commander McBragg (http://www.youtube.com/watch?v=q4roxM8hUMk).
That makes sense--I hadn't thought of that, but it meshes well with my feeling of a tall tale, which is the kind of tale best suited to telling at a pub with drinks freely flowing.
My favorite example of tall tales is the Big Fish book, which is basically a series of tall tales. Though in that case the first chapters are more exaggerated than the later, probably because the the beginning of story is a history of a father's life as told to his son in the form of tall tales, so the earlier chapters can be more fantastical since the boy had not been born yet.
From the editor Ernest Jerome Hopkins:
"To a Westerner no explanation should be needed for the fact that Ambrose Bierce wrote twenty-three "tall tales," since this was the one form of literature that the pioneers had brought across the plains, and it probably had its origin in the frontier farm country long before that. The essence of a "tall tale" was high exaggeration presented in a deadpan manner as truthful fact; it was a hoax aimed seriously, and the moment he betrayed that belief, as by a harmless question, the works blew up. ... And the suckers indeed fell for hoaxes--solemn Eastern critics regarded these stories as out of taste and were shocked, especially, at "oil of Dog" ... In the West these critics and psychologists would have had to buy the drinks."
I'm an engineer, and thus no expert on literature, but prior to Manifest Destiny how much fantastic fiction was presented as truthful fact? As I understand it, much early fiction had to be fully grounded in the real world, otherwise it was not literature. When did this format start where the real world is used with elements that stretch the boundaries, as in a tall tale? My understanding is that the format of the "tall tale" is America's only major contribution to literature forms.