If I read this right, there is a privacy issue in that a user logged in under one account is able to view information of a user under another account. That should not happen on a secure system. Whether that's a problem with how XP handles accounts or an issue with Firefox is not clear from this amount of info though.
Going into geek mode for a moment. The software settings unique to a specific user is typically stored in their profile (Legacy 16 bit apps, or poorly written ones excluded ). A users profile in XP is stored by default in the C:\Documents and Settings\XXXX\ntuser.dat file (where XXXX= the persons userid). By default this folder and file have their security permissions set to allow only that user to be able to access it. In practice of course, everyone tends to be made an administrator of their home PC and could reset the permissions on anything they want to. Although not impossible, it is highly improbable and very unlikely that Firefox was written to scan other ntuser.dat files during its' startup in order to pull it's settings for the current user. Instead, they are either caching the information in the actual program folder Firefox was installed in or what is more likely are storing it in the registry under the HKEY Local Machine.