Well I wanted to integrate launchy with firefox 3 bookmarks for quite some time and never got the time to find a workarround ’till today.

Thanks to my beloved Lifehacker Magazine I was able to do it with this article.

On the short it says:

1. Open Firefox
2. type about:config on the location bar and press enter
3. then type browser.bookmarks.autoExportHTML and from FALSE passit to TRUE with a double click.
4. Restart Firefox
5. Rebuild your index
6. You’re ready to go! 

This will allow launchy to index your firefox bookmarks, the only problem with this workarround is that it will index the new bookmarks after you close firefox. This is because firefox dumps your bookmarks to the bookmarks.html file when it is closed.

Hope this helps