I had the same problem. Just fixed it. Go to:
[drive]:\Documents and Settings\[user]\Application Data\Mozilla
Rename the folder "Firefox" to something like "Firefox.old."
Start firefox again. You will have lost all of your preferences, but what good are preferences if the program doesn't work?
When you restart firefox the folder will be recreated with the default settings. I found my bookmarks in my old preferences folder and copied them into the new one. The file is called: bookmarks.html. The rest I just tossed. I've installed firefox on several operating systems on several computers and am a long time user of it. This is the first time I have seen anything like this before. I still think it's worlds better than IE.