If you want to permanently disable Firefox's "Remember Passwords" Feature.

1. Go to Tools -> Options -> Privacy
2. Click on the + sign next to the words "Saved Passwords" or, in newer versions
of Firefox, click on the "Passwords" tab.
3. Click on the "View Saved Passwords" button.
4. Click on the "Remove All" button. [To the Firefox gurus out there: Yes, you
can do the same thing in "Clear Private Data." But you still have to go to the
Passwords tab to disable "Remember Passwords." I just figured we'd take the
direct route.]
5. Click on the "Close" button.
6. Uncheck "Remember Passwords."
7. Click on the "OK" button.

Doing this clears all of your old web passwords and prevents Firefox from
remembering any new web passwords in the future.