Last night while I was in bed waiting for sleep to oh-so-slowly sneak up on me, I had a brilliant idea how to fix Firefox. Why I was thinking about Firefox and its broken extensions and themes, I’ll never know. However, the point is that I was thinking about it and I vaguely remembered a check box somewhere that said “Allow web sites to install software.” Being the paranoid person that I am, I unchecked it as soon as I installed Firefox and didn’t give it another thought. Until last night. Today, I rechecked the box and voilà! themes and extensions work. So, if you are having the same problem, look for that check box in Options under Advanced.
There are still some bugs with Themes and Extensions, especially those that have not been updated for 0.9, but at least they install now.