Mozilla/5.0 (Windows; Windows NT 5.1; rv:2.0b3) Gecko/20100805 Firefox/4.0b3
The bookmarks dropdown button (the one equivalent to the bookmarks menu item) can be made visible in the menu bar, but not in the nav bar. Meaning, if I have the bookmarks toolbar turned off (which is a prerequisite for the button showing up at all, I understand), the bookmarks dropdown button is shown if I have it placed in the menu bar, but not if I have it placed in the nav bar.
1. Turn bookmarks toolbar off
2. Customize toolbars so that the bookmarks dropdown button is in the menu
bar, to the right of the "Help" menu
3. Finish customizing
4. See the bookmarks dropdown button to the right of the "Help" menu
5. Customize toolbars so that the bookmarks dropdown button is in the nav
bar, to the right of the address field
6. Finish customizing
7. See the bookmarks dropdown button vanish from the nav bar
I think this is intended. As you said, the button is equivalent to the menu item, so if you have the menu showing, then the button is redundant.
It is rather weird that you can customise the button onto the menu bar or other places, because it only does the automatic hiding when on the nav bar. That is probably bug 583749
This appears to have been taken care of in the meantime. It's working for me with 7.0.