Written by Lifehacker

The newest version of our favorite open source web browser, Mozilla Firefox 3, offers dozens of new features and fixes, but only a handful will make the most dramatic difference in your everyday browsing. After 17 months of alphas and betas, Mozilla’s finally made a feature-complete release candidate available, so it’s time to spotlight the biggest improvements that will make “Gran Paradiso” the browser to beat. Nearly everything in the open-source app has gotten a second look from the minds at Mozilla, from back buttons to bookmarks, address bars to add-ons, passwords to performance, and the changes will make Firefox 3 worth the upgrade come its official release date, slated for sometime next month. Let’s take a look at the 10 best upgrades in Firefox 3, and how they’ll bolster your browsing, after the jump.

Note: Firefox 3 hasn’t been officially released yet-a public preview release is available and intended for testers only. While it’s a very stable preview, only use it if you’re willing to deal with bugs and instability as the Mozilla teams ready the official release.

That said, our favorite Firefox 3 features include:

10. Souped-up Add-ons manager

A big part of what makes Firefox so special to power users is its extensibility with extensions, add-ons, plug-ins and themes, and Firefox 3’s Add-ons dialog got the attention it deserved. The Fox’s Add-Ons menu is more robust and intuitive on at least two fronts. You can search and install extensions and themes right from the pop-up box, no browsing required. Also, a new plug-in manager lets you enable and disable third-party helpers like Flash, QuickTime, and anything else that makes content work (and causes you grief).

9. More intuitive interface overall

Mozilla tweaked and updated a whole lot of little things here and there throughout Firefox 3, which amounts to a big overall boost in usability. Most noticeably when you first switch, the Back button only appears on the address bar if there is a page to go back to, and when it does, it’s bigger and easier to click. Users who want to make sites with small text more readable permanently are in luck; Firefox 3 can increase the size of images and text, or just the text, on hard-to-read sites. In addition, Firefox 3 applies favicons more consistently to bookmarks, you can click a site’s favicon to get extended site identification information, you can resize the search box to hold more than two words, and the find-on-page search box automatically grabs the currently selected word, just to name a few new UI improvements.

In the long term, once webapps catch up, Firefox 3 will let you do really neat stuff in your browser, like register your favorite webapps to open certain file types, and access your online data even when you’re not connected to the ‘net. To get a taste, see how you can configure Firefox 3 to launch Gmail for mailto links.

8. Stronger phishing and malware protection

Firefox 3 has stronger filters and protection against malware, phishing sites, cookies, and other tools that compromise privacy and security. A malware warning shows up when you visit sites known to install malicious software, Firefox 3 doesn’t show the content of knock-off sites (like PayPal “Update Your Account” phishing scams) by default, and Firefox 3 checks against Google’s ever-growing blacklist of phishing sites. Now you can feel even better switching your less tech-aware relatives over to the open-source browser.

7. Improved download manager

Never wonder where a download came from, or went to, again. Gran Paradiso’s download manager lets you search through recent files, resume big downloads after a crash or restart, and lets you keep an eye on your transfers in the status bar.

6. Native looks for every system

Your browser is a serious part of your computer time, so having it look like nothing else on your system can be seriously annoying. Firefox’s designers made system integration a priority with this release, and it shows-even Windows XP’s and Vista’s button layouts have subtle differences in color and shading. There’s differences at deeper levels, too, with Cover Flow-type styling in the add-ons manager for OS X, transparencies in key places in Vista and OS X, and other tweaks that make your browser feel like a natural extension of your system.

5. Streamlined “Remember password” handling

No more guessing whether you’re saving the right password or clicking “Cancel” on unnecessary pop-up requests. Gran Paradiso only asks you to utilize its password-saving function once you’re already in and sure everything worked, and it won’t block you from seeing the logged-out version of a page if you don’t want to sign in.

4. Smart bookmarks

Much like iTunes’ Smart Playlists, Firefox 3’s new Smart Bookmarks function can analyze your browsing habits and create lists of links based on it. The default bookmark toolbar only comes with three standards, “Most Visited,” “Recently Bookmarked,” and “Recent Tags” (more on that later), but it’s none too hard to make your own.

3. Places Organizer replaces the Bookmark Manager

Previous versions of Firefox’s bookmark organizer have been pretty utilitarian affairs that make you drag and drop your links around nested folders. With Firefox 3’s new Places Organizer, those with reams of URLs can find them using boolean rule searches and multi-column results, as well as keep them better organized with a tagging system. Better still, you can save those smart searches for when you next need them.

2. Smart Location Bar learns how you browse

Like a personal assistant who telepathically knows when you’re going to need just the right phone number (or Starbucks fix), Firefox 3’s address bar, now dubbed the Smart Location Bar, helps you get to your frequently visited, or recently discovered, sites in super-quick fashion. That application you just read about on Lifehacker, but can’t remember the name? Type “li” into your address bar, and Firefox instantly pulls the relevant sites from your history. The bar also learns through repetition, so the next time you start searching with “li,” it knows you’re looking for Lifehacker, not Linux.

1. Insanely improved performance

It’s not flashy, and it doesn’t have any social networking features, but Firefox 3’s actual performance is the best reason anyone should consider upgrading, or making the switch to the ‘fox. Firefox’s engineers claim that their third major release is 9.3 times faster than Internet Explorer 7 in JavaScript performance, and 2.7 times faster than Firefox 2. This means snappier browser performance when you’re using webapps like Gmail, Remember the Milk, and more. Even more important, especially for Mac users, is the improved memory usage and more than 15,000 improvements that make for a less crash-prone browser. I’ve seen noticeable speed-ups in page loading in Linux, XP, and Vista, but the real reason I’ve switched over to using Release Candidate 1 is that I haven’t had to cross my fingers every time a Flash-based video loads. Graphed comparison of memory use amongst browsers in Vista courtesy of John Resig.

What features or changes have made you a true believer in Firefox 3? What upgrades are you still waiting to see added to the mix? Let’s hear your take in the comments.