After a week of trying to find any problems with Firefox 0.8 I'm about to give up. I can't reproduce the problem you've documented here. I even tried using Suse, Knoppix, DedHat, and Mandrake without problems. A couple things that may/may not help, download the latest updates for your OS and reboot the machine. Reinstall Firefox after a second reboot if there is any additional software that needed to be finalized after update. If that doesn't work for ya, try Opera... many of the same features (and then some) that you find in Firefox.
Keep me posted if you find a solution or even if the problem corrects itself.
:pint: