I think it is great. Bookmarks on FF always sucked really, really bad. With the ability to search them on the fly, I am almost happy (it is a hard problem, how to organize information).

Maybe it should be possible to disable it, but since I actually like it, I don't care...

You know about the bookmark keywords, right? I have set news.yc to keyword yc (in the properties of the bookmark), so when I type "yc", I go straight to this site. Maybe that feature could alleviate your pain?