From MozillaZine Knowledge Base
Firefox’s Password Manager can expose usernames and passwords on websites with cross-site forms (that is, HTML forms that submit to other domains). This includes many sites that will display unsanitized user-submitted content, such as MySpace.
As an initial defense against such attacks, this preference was created to prevent the Password Manager from auto-filling form fields with usernames and passwords.
Possible values and their effects
Automatically fill sign-in forms with known usernames and passwords on appropriate sites. (Default)
Do not automatically fill sign-in forms with known usernames and passwords; instead, act as though there are multiple usernames/password pairs remembered for the form (fill password after username has been manually typed).
If you use the Password Manager in Firefox to store your passwords, setting this preference to false will prevent the mentioned attack from succeeding.
First checked in
Has an effect in