(I am only another End User who happened to have this problem, but this thread came up highly on a Google search so I'm jumping in with what I've learnt.)

To the best of my understanding, something in the inner workings of Gmail has changed and Gmail Manager is no longer fully compatible with it.

Someone has created a modified version, which many are claiming success with, but it locked Firefox up totally for me (had to use Firefox Safe Mode to uninstall it). You'll need to trawl through the last few pages of the Mozillazine forum thread to find the link if you want to go that route.

I have switched to using "Gmail Checker" by Trinh Nguyen, which works fairly similarly on the surface (adds a little inbox-counter thingy to the status bar which has a right-click menu full of stuff) but seems to be unaffected by the changes.

If you're going to go that route, I suggest Disabling Gmail Manager in the Add-Ons window, installing Gmail Checker, and searching for "longfocus" in your Saved Passwords to remind yourself of your gmail passwords. (If you're the sort of person who is juggling several gmail / Google Apps accounts and can't be sure you know the password to all of them!)

The developer has an updated version with a fix and it works perfectly. http://www.longfocus.com/firefox/gmanager/