Creating and Handling Different Profiles in Firefox
Most of the bloggers and people who follow blogs and technology tend to use Firefox more than Internet Explorer. But what if you use a shared computer at home and each one has their own huge list of Bookmarks and Firefox Plugins? This may not only be annoying but also reduce the effectiveness of Firefox with lots of plugins. So, the answer is to use different Profiles for each one of them in Firefox.
As Mozilla claims this is also useful for developers who develop Firefox plugins or extensions.
The first Step: How to Create Different Profiles?
Note: In order for this command to work, you need to close Firefox. Try opening this page in Internet Explorer or just copy these steps and save it in your desktop.
1 ) Go to RUN and enter firefox.exe -ProfileManager and click OK. (In Vista you can use the search box in the start menu)
2 ) You will get Firefox Profile Manager Box, in that click Create Profile.

3 ) Give a meaningful name and click Finish. You can give the names of different people who would be using Firefox from that particular system or just give any name.
4 ) From the Firefox Profile Manager, you can create as many Profiles you want, rename and delete profiles.
5 ) Now each person can use different profiles and install extensions on their own need.
How to open Firefox with Different Profiles?
Option 1:
In the profile manager, if you leave the option ‘Don’t ask at startup‘ unchecked then you can choose the profile you want when Firefox loads.
Option 2:
This option is much easier as it helps to create shortcuts for Firefox with different profiles.
1 ) Create a shortcut in the desktop or wherever you want. Right click and open its Properties.
2 ) On the Target Section just add -P XYZ -no-remote after its contents, where XYZ is your profile name. (See the Image for Example)

3 ) Create shortcuts for all the profiles you want and this will also help you to open as many Firefox sessions with different profile at the same time.More about Handling Profiles in Firefox from Mozilla

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Great Tip! Thanks for sharing
[...] LyteByte has a good article on using different profiles on Firefox [...]
Thanks for sharing:) It’s useful for me, because im sharing my pc with parents.
[...] Managing different Profiles in Firefox - Joel [...]
[...] Now, in this you won’t have to create a shortcut. You can use Run to open the Profile Manager. I didn’t know that we can also start it through Run. I read about this at Lyte Byte. [...]
I followed the instructions and I was able to create different profiles, When i use the last instructions to create a firefox shortcut and change the target to one of my profile names, it automatically opens to http://www.profile.com
a social networking site (i have never been to in my life!)
once open i can click the “home ” button and its does load my saved home pages, but clicking the shortcut associated with my profile always opens this site frst..
any work around? obviously its a bug
Option 2, step was a little confusing. You should say, first create a desktop shortcut by right clicking on the desktop, and select new shortcut. Then, in the dialogue box that comes up, select browse, and scroll to the firefox icon. Then select the Firefox icon. After the pathway in placed in the target box, add after it: -P xyzname -no remote Then close, and your in business. Otherwise, this was a real help at getting a DESKTOP shortcut, and not just having to open the profile manager every time. Thanks!