Along with an album view (like cover flow) and a thumbnail view (with drag and drop), this extension also adds previews to the tooltips in the bookmarks sidebar. Just hover over a bookmark in the sidebar to see the previews.
In Firefox 3 you can access the two new views by opening the Library. To get there go to Bookmarks>Organize Bookmarks. From there you can toggle the view with the 3 buttons to the left of the search box or from the View menu.