Well, it’s quite straightforward so I won’t bother getting into the details, but it’s absolutely worth a try.
So far I used to use another extension which just allowed the user to tag a page and add it to his del.icio.us bookmarks: the feeling I had before was that my del.icio.us bookmarks were just separated from my Firefox bookmarks (and they actually were). Now I really feel they are a single, integrated set, since I can browse, add and search links in Firefox.
Some months ago I actually thought having such an extension would be nice, glad to see guys @ Yahoo! worked on it.