I found the binary "firesheep-backend" in:

    ~/Library/Application Support/Firefox/Profiles/<profile>.default/extensions/firesheep@codebutler.com/platform/Darwin_x86-gcc3

I ran both:

    ./firesheep-backend --fix-permissions

and

    sudo ./firesheep-backend --fix-permissions

and it still asks me to run it with "--fix-permissions". I guess it's time to go digging around in the source to try and find out what it wants me to do.

EDIT:

After a bit of digging, I found out that running it with --fix-permissions really just chowns the binary to root then setuid's it. I don't see anything wrong with it on the surface, but I'll keep digging.