I have been using the latest nightly zip build of FireFox on my iPod. I have configured my profile to reside in my iPod using the FF profile manager so that I can carry my extensions along. I haven't found a way to change the profiles.ini path from the default %AppPath% folder, but the first time I use FF from my iPod, I configure it to use the profile present in my iPod. That way my settings and bookmarks are available whereever I use the nightly FF build.
How does Portable Firefox differ from the method I use?