After about 20 minutes of frustration watching Selenium tests fail to launch Firefox 2.0 sessions I found the culprit buried in the bottom of the Selenium RC FAQ:
There’s a bug (SRC-216) that prevents Firefox 18.104.22.168 or later from starting up in Selenium RC 0.9.0. Until the new version is released, please use a latest SNAPSHOT version.
The SNAPSHOT release is at 0.9.2 and the public release is at 0.9.0. 0.9.0 is about 8 months old now and the SNAPSHOT release of 0.9.2 is current as of July 7th, 2007. I think it’s time to have another public release and save some pain.