On the security point:

In the past, Firefox marked all downloads as originating from the internet so that it triggered Windows' attachment security feature. Users could disable that by setting the preference browser.download.manager.scanWhenDone to false.

Starting in Firefox 26, zone marking of downloads is done only for executables. Users can disable even that zone marking by setting the preference browser.download.saveZoneInformation to false in about:config.

This change was to improve performance; this mail thread has the background: https://mail.mozilla.org/pipermail/firefox-dev/2013-August/000848.html

However, there was pushback because some nonexecutable files can be unsafe, such as ZIP archives. A change has been implemented for Firefox 29 to behave more like other browsers: if the user has the Windows default settting to zone mark downloads, they will be zone marked. See: Bug 952961 – Firefox 26+ does not mark downloaded non-executables as coming from Internet zone.

I'm not sure whether that change will be uplifted to Firefox 28 (beta), but it seems as though there is enough time, so probably. However, I think there is pretty much zero chance that it could find its way into a point update for Firefox 27.

Regarding the download location:

Are you choosing a folder for each download, or are you setting your preferred location in the Options dialog: Startup, home page, tabs, and download settings?

thanks for your reply: I have it set in the options dialog box to another drive on my computer. It seems this is overridden and sent to the default C: download file.

Thanks very much for your quick and informative reply. much appreciated. Looks like I will just have to wait for 28/29 to be released.

Hi dublindave, I don't know why the different drive setting is not working. I think in another thread someone mentioned a problem with saving to their RAM drive (it was set as drive R), but searching for it isn't working very well.

In case Firefox somehow has its settings mixed up, could you "jiggle the handle" by changing it to a different folder (also not the default downloads folder) and doing 1 download there to see whether that works, and then change it back to your preferred folder and test again?

Regarding the download folder problem, see this thread: updated to ff27. I have d/l supposedly go to flash drive, worked fine until update, now they go to windows default dowload folder.