I tried to post this in the thread that comes up first in Google for the error message:
But it appears to be locked. So here I am. Please hear me out.
I encountered this problem, and was mystified - I'm a power user, I know how these things work, and there was no firefox.exe in the process list. I logged out, logged back in, just to make sure, and it *still* wouldn't work. So, out of desperation, I rebooted, and Vista gave me the "There are other people logged in and rebooting may possibly screw them over" message. Then it clicked - the other user probably had Firefox running, and that was probably what my Firefox Portable was detecting.
So upon reboot, I did some testing, and that was indeed the case. I logged in as myself, and then logged in as another user (Administrator), started Firefox from the local machine, and switched back to my login. Sure enough, I tried to start Firefox Portable, and it gave me the error.
When I brought up Task Manager, firefox.exe didn't show because it was under another user, and by default, Task Manager doesn't show other users' processes. I'm an admin on this machine/domain, so I don't know what privileges non-admins have, but I was able to check the "Show processes from all users" box* and kill the firefox.exe instance in the other session. I'm assuming non-admins don't have the privilege to kill, and perhaps even view, other users' processes, but I can't easily test that.
So what should be done? The easiest solution would be to add an addendum to the above-linked thread with a summary of this issue, so that people like me will Google it and find the solution.
A better, slightly more difficult solution would be to modify the error message in Portable Firefox so that it says something like "You or someone else logged into your machine has a copy of Firefox running. Rebooting will solve this issue, but may cause other users to lose work."
And even cooler, but probably not worth it for the minor issue that this is, would be to have Firefox Portable check to see what user is running the copy of firefox.exe and act accordingly - I'm not sure what that would look like, as I don't know if running two copies on different logins is any safer than on the same login.
*Note - another thing I noticed is that the Administrator login (but _not_ logins that just have admin privileges) have this box checked by default.