Please see http://support.mozilla.com/en-US/questions/777886 for the solution to the same problem. Or like jesnft said in the above link, follow these steps-

For Firefox 4.0, several people have provided the solutions. The solution at: http://techmix.net/blog/2011/03/26/pr.../problem-with-pinchzoom-on-firefox-4-mac-osx/ restores Pinch-Zoom capability but with discrete steps. You also need to set browser.gesture.pinch.latched to false as was pointed out by iibpmii

So combining the steps, the complete solution that worked for me is:

   - Open a new Tab and type in “about:config” (without the quote) in the address bar
   - You will be asked to confirm to continue. Just do it.
   - Search for the term “browser.gesture” (without the quote).
   - Edit the browser.gesture.pinch settings as follows: 

   browser.gesture.pinch.in Value = cmd_fullZoomReduce
   browser.gesture.pinch.in.shift Value = cmd_fullZoomReset
   browser.gesture.pinch.latched Value = false
   browser.gesture.pinch.out Value = cmd_fullZoomEnlarge
   browser.gesture.pinch.out.shift Value = cmd_fullZoomReset

Wow, thanks, it worked!

Awesome! If you could please mark this question as solved, it would be easier for other contributors :)

This answer worked for me too. Thanks Brinda!