I have this problem, too. For a couple of hours because of this I have been struggling with FF5.0, but thinking I might have to revert to FF4.x. What about you? See my post “Cascading menu of bookmarks now awkward.” I notice our system details both show MacOSX 10.5.

https://support.mozilla.com/en-US/questions/843201

I fixed the problem by returning to Firefox 3.6. I googled "return to old version of Firefox." The instructions said that version 4.0 is no longer maintained and is considered insecure. Yes, I have Mac OSX 10.5.

I have been able to restore the expected behavior of the cascading menus to my (admittedly large collection of) bookmarks by editing the names of the folders of bookmarks at the top level so that they are all very short. After that the subfolders and their contents work fine. This involved putting new, unsorted bookmarks in folders (they were some wide ones).

Apparently this is linked to the “bookmarks too wide” problem.

Here is a Mac Bug that was filed about that issue, back in mid-January about the Firefox 4 betas. The last 2 comments seem to indicate that is related to 64-bit Mac's.
https://bugzilla.mozilla.org/show_bug.cgi?id=626066

This didn't work for me. "Church" and "Travel" are typical of my folder names. The cursor stuck, or the contents cascaded all the same. I'll stick with the old Firefox until more of the bugs are eliminated.

I do agree. Mine is not *perfectly* fixed neither. When the folder’s contents list is wide and contains subfolders, the cursor needs to go completely above or below those subfolder’s contents to be released from displaying it. I can readily imagine how yours is not practical.

But mine is decent enough that I am going to live with it for now, hoping that the prior functionality (which is normal behavior IMO) is restored in an upcoming release.

Trying to describe this gives me a newfound appreciation for those who practice the craft of technial writing.