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After installing the extension, it took a while for me to figure out why it wasn't working and how to enable it.
1. I checked the Menu->Add Ons->Extensions for an "options" button
2. I also checked the Menu->Web Developer menu
If the status bar text were replaced with an icon that's green/red for on/off it would probably be more easily located.
There should be a menu under Web Developer. Maybe there is a bug causing it not to show. :(
But I think status bar suggestion is very good. FoxyProxy for example has its little fox icon normally but it has a red cancel overlay when it is not enabled.
Personally I'd like to see an on/off switch in the Firebug UI itself (perhaps under the script tab menu).
Can the Firebug UI be extended this way?
I haven't checked yet but there is seems to be entry points in firebug to extend it:
Extending firebug would be great indeed. That was the first place I checked, under the Script tab, however, you should also provide an enhancement for those who don't have firebug installed.
Maybe enabling the "options" button for the addon in the addons tab would be useful too.
It does appear in the "Web developer" menu for me.