Well there you go, learn something new everyday.
Turns out there's a couple of add-ons that I use with Firefox that can screw things up.
Disabled add-ons, found restore function worked again.
All bookmarks recovered successfully. Who's a happy boy?
Found the answer at
http://support.mozilla.com/en-US/kb/Bookmarks+and+toolbar+buttons+not+working+after+upgrading#Check_for_incompatible_extensions------------------------------------------------------------
Check for incompatible extensions
1. From the menu at the top of the Firefox window, click Tools and then select Add-Ons. The Add-Ons window appears.
2. In the Add-Ons window, select the Extensions panel to see your installed extensions.
3. Look for these extensions known to cause this problem:
* Freecorder
* Piclens
* Skype extension
* Any toolbar extension based on the Conduit toolbar platform
* Google Toolbar
* FoxyTunes
4. Disable each extension you have from the list above.
1. Click the name of the extension you wish to disable.
2. To disable the extension, click Disable.
3. Repeat these steps for each extension you have that is on the list.
5. After the extensions are disabled, Exit Firefox completely and end any remaining firefox.exe processes, as explained above.
6. Start Firefox normally.
7. Close Firefox again; click the File menu and select Exit.
8. Start Firefox again to see if the issue is resolved.
