Only happens in google sites as far as I know

the "never for this site" option for password remembering does nothing in the newer versions..help!

If you use "Clear History when Firefox closes" to clear history and other data then make sure that you do not clear the "Site Preferences". Clearing the "Site Preferences" will clear all exceptions including exceptions for cookies, images, pop-up windows, and software (add-on) installation and password exceptions. See Delete browsing, search and download history on Firefox

i've not cleared my site preferences....still the problem persists.....and well i got to agree that it generally happens with google sites....like gmail, orkut, etc...

See also http://kb.mozillazine.org/Password_Manager (Troubleshooting)

thankx for the link...but now i am damn sure that the problem is just for all the google sites .... it works for all except google sites... may firefox fix this is its next update...

Start Firefox in Diagnose Firefox issues using Troubleshoot Mode to check if one of your add-ons is causing your problem (switch to the DEFAULT theme: Tools > Add-ons > Themes). See Troubleshoot extensions, themes and hardware acceleration issues to solve common Firefox problems and Troubleshoot issues with plugins like Flash or Java to fix common Firefox problems

If it does work in Safe-mode then disable all your extensions and then try to find which is causing it by enabling one at a time until the problem reappears. You can use "Disable all add-ons" on the Safe mode start window. You have to close and restart Firefox after each change via "File > Exit" (on Mac: "Firefox > Quit")