I was trying to synchronise my Firefox bookmarks on two systems when I realised the old bookmarks.html file was no longer being used. Firefox 3 now uses the "places.sqlite" file to store bookmarks.
To confuse matters, the old bookmarks.html files were still on my two systems. It was only after I checked the "last modified" date when I realised they were no longer being used by the current version of Firefox.
More details here:
MozillaZine: Lost bookmarks after Firefox 3 upgrade