This might be an upstream bug, but if you have a ~/firefox directory (which need not even contain anything), Firefox will not start. Observe: neil@x2-42 ~ $ mkdir firefox neil@x2-42 ~ $ firefox Could not read application.ini neil@x2-42 ~ $ rmdir firefox neil@x2-42 ~ $ firefox neil@x2-42 ~ $ (The second run was successful.) I had an old beta binary of firefox directly from their site sitting around in my home directory, and after a recent update (from www-client/mozilla-firefox-3.5.2 to www-client/mozilla-firefox-3.5.5) Firefox decided that it didn't want to start anymore. Discovering the above issue was very non-obvious.
Please report bug upstream and cc mozilla@gentoo.org
Done: https://bugzilla.mozilla.org/show_bug.cgi?id=530704
Thanks for the report, this is such a small minority I will continue to track via upstream bug.