what advantage is there to the highly visible white back of the rabbits tail (at least the rabbits in my part of town)?
makes it very easy to follow, for predators, as it runs away.
must be something very beneficial to outweigh this critical disadvantage.

The white flash is indded a easy spot for a predator, but only once erected and the rabbit is moveing at high speed and thus unlikely to be caught. Obviously rabbits are very fast, so unless ambushed are unlikely to be caught. When moving normally, the tail is kept down and the white underside hidden, so they do not give themselves away. When in danger however the tail comes up and they run.

Here the tail may serve two purposes and separating them out is tricky. It could be a warning to other rabbits to run away. The individaul probably has close relatives nearby and the white tial serves as a warning to them to escape too. Secondly it may serve as a siganl to the predator - I have seen you and I'm running, don't bother chasing me. There are lots of parallel signals in various other animals (deer are the obvious example that also display a white tail when runnign away). It is difficult to tell them apart and the signal may have evolved to do both at once.

Obviously this will be under stong evolutionary pressure as either way it is likely to lead to the survival of the rabbit, or his relatives in exchange for only a very small change in anatomy (a bit of white fur).