Profiles are very important as they contain the bookmarks, visited links, stored passwords and also some installed addons. If a profile is deleted during updating a browser or due to reinstallation, we will have to start from scratch. All the favourite links, bookmarks and the settings in the browser are lost. We will have to do the settings all over again. So it is always good to backup the profile in Firefox.
To backup the profile in Mozilla Firefox, there is a manual method and also there is an automated method (for backing up addons).
In the manual method (in windows Xp), just go to C:\Documents and Settings\username\Application Data\Mozilla\Profiles and then have a copy of the profiles folder to backup the profiles.
Note that Application Data is a hidden folder and you will have to set windows to show hidden files.
If you want to do it using an extension then FEBE (extension) is the one which will do the trick for you. You can use it to backup your addons and also helps in generating .XPI files which can be used for further installation.