I had the same issue under a fully patched Xubuntu 8.10 box.  The bug is
caused by file(s) in the ~/.firefox directory not being readable.  In my
case, a few were owned by root - which may have been caused by a recent
VMware Server 2.0 install.

Firefox functionality was restored by running the following command:
sudo chown -R user:user ~/.firefox

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Navigation bar in firefox is disabled
https://bugs.launchpad.net/bugs/302787
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