It's a good idea from a security standpoint to upgrade your browser, but what increases your security in one area might make you vulnerable in another!
According to research carried out by Mozilla's security team, 25% of people who weren't prepared to upgrade from Firefox 2.x to 3.x cited the inability to clear the Location Bar history as a reason for sticking with the old browser.
As Alex Faaborg, Firefox’s principal designer, explains, "When we expanded the capabilities of the location bar to search against all history and bookmarks in Firefox 3, a lot of people contacted us to say that they had certain bookmarks they didn’t really want to have displayed." In other words, the new Firefox feature exposed bookmarks that had been previously hidden away!
Given this level of resistance to the Location Bar, it's clear to see why Firefox added private mode to Firefox 3.5.