The safe-mode dialog says "Firefox is now running in Safe Mode, which temporarily disables your custom settings, themes, and extensions."
Unfortunately, this is not true. Toolbar customizations are disabled, but all options set through the options menu or about:config are apparently still in effect in safe mode.
I checked that (1) there is no 'user.js' file and (2) the options are not just shown on the UI, but are actually in effect. There's more discussion of this here: http://forums.mozillazine.org/viewtopic.php?f=9&t=2351693&p=11420027#p11420027
A suggested revision would be "Firefox is now running in Safe Mode, which temporarily disables your themes, extensions, and toolbar customizations."
Bug occurs in version 7.0.1 under Windows and Linux.
This is a good point, and the string has actually been changed since the filing of this bug. It no longer mentions that your settings will be temporarily disabled. Thanks for filing, Vanilla!