I have a simple test module:

function tabletabs_menu() {
  $items['tabletabs'] = array(
    'title' => 'Table Tabs',
    'page callback' => 'drupal_get_form',
    'page arguments' => array('tabletabs_form'),
    'file' => 'tabletabs.module',
    'access arguments' => array('admin'),
  );

  return $items;
}

function tabletabs_form($form, &$form_state) {
  $form['tabs'] = array(
    '#type' => 'vertical_tabs',
    '1' => array (
      '#type' => 'fieldset',
      '#title' => 'Tab 1',
      'a' => array(
        'x' => array (
          '#markup' => '1-a-x',
        ),
        'y' => array (
          '#markup' => '1-a-y',
        ),
      ),
      'b' => array(
        'x' => array (
          '#markup' => '1-b-x',
        ),
        'y' => array (
          '#markup' => '1-b-y',
        ),
      ),
    ),
    '2' => array (
      '#type' => 'fieldset',
      '#title' => 'Tab 2',
      'a' => array(
        'x' => array (
          '#markup' => '2-a-x',
        ),
        'y' => array (
          '#markup' => '2-a-y',
        ),
      ),
      'b' => array(
        'x' => array (
          '#markup' => '2-b-x',
        ),
        'y' => array (
          '#markup' => '2-b-y',
        ),
      ),
    ),
  );
  return $form;
}

It gives me:

This is pretty much expected result. Now, if I add:

function tabletabs_theme() {
  return array(
    'tabletabs_form' => array(
      'render element' => 'form',
      'file' => 'tabletabs.module',
    ),
  );
}

function theme_tabletabs_form($variables) {
  $form = $variables['form'];
  $output = '';
  foreach ( element_children($form['tabs']) as $id_tab ) {
    if(is_int($id_tab)) {
      // Initialize the variable which will store our table rows.
      $rows = array();

      // Iterate over each element in our $form['product'] array.
      foreach ( element_children($form['tabs'][$id_tab]) as $id_row ) {
        $classes = array('');

        $rows[] = array(
          'data' => array(
            drupal_render($form['tabs'][$id_tab][$id_row]['x']),
            drupal_render($form['tabs'][$id_tab][$id_row]['y']),
          ),

          'class' => $classes,
        );
      }

      $header = array(t('x'), t('y'));

      $table_id = 'tabletabs';

      $output .= theme('table', array(
        'header' => $header,
        'rows' => $rows,
        'attributes' => array('id' => $table_id),
      ));
    }
  }  
  $output .= drupal_render_children($form);
  return $output;
}

this cannot work. I'm rendering tables before vertical tabs, so of course they appear before, too:

But how do I render them to appear inside vertical tabs instead? I'm sure I'm missing something little and obvious (once you know it).