Hmmmm .... this is just dumb, ofcourse Firefox ( or any other programs ) must save somewhere it's preferences. This is what this is, it's not a privacy issue.
Sure it is. Windows has completely separate folders for each user, capable of holding their settings. These folders can be password protected, although Windows doesn't require this.
Programs have the choice of whether to save settings in the program folder or in the user folder.
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.
My run in with the "old profile" flaw caused mysterious crashes in upgrades to Firefox. The old profiles can have data in them which newer versions of Firefox can't handle.
Initially I thought Firefox was crashing because I was running it on WinXP 64-bit but then I had the problem on a couple XP 32-bit machines. I did a couple uninstalls and deleted the Program Files directory of Firefox before I found the Mozilla profile folder in Application Data.
Manually deleting the profile folder before an upgrade to Firefox fixes the problem.
Eventually, someone is going to flag the bug and fix it - probably with a "Delete Detected Profiles" option in the installer.
"Hmmmm .... this is just dumb, of course Firefox ( or any other programs ) must save somewhere it's preferences. "
How about a simple click on "clear all" of the privacy pane in preferences.