The problem no longer affects me with the newest updates installed.
apt-cache policy firefox
firefox:
Installed: 3.5.3+build1+nobinonly-0ubuntu6
Candidate: 3.5.3+build1+nobinonly-0ubuntu6
Version table:
*** 3.5.3+build1+nobinonly-0ubuntu6 0
500 http://at.archive.ubuntu.com karmic/main Packages
100 /var/lib/dpkg/status
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Icons missing in Firefox searchbox drop down list (karmic)
https://bugs.launchpad.net/bugs/432876
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