toolbarmode changed owner - this is good news as it means there should be a new version hopefully soon on addons.mozilla.org!
This is a little toolbar feature that got extracted from the eurekster toolbar.
All it does is to add an entry to the toolbar context menu (right click). With that you can set the toolbar style and the icon size. Basically the same as 'Customize'. The big difference is that you can customize each toolbar separately.
Unfortunately, there are some toolbars that store those settings in extension specific properties that will override the custized settings after each restart. However, since 0.6.1 there is code to handle that as well.
Currently, only the (otherwise) excellent webdeveloper toolbar is supported. Let me know about others and I will add them as well.
Firefox 3 support
Finally, toolbarmode now works in Firefox 3 (0.7.5).
I haven't updated version numbers for any other applications like flock, sunbird, etc. if you want/need a build let me know and I'll try it.
Firefox 2.0 support
... is now in 0.6.5. There is also support for a few new locale - thanks to http://www.babelzilla.org and all the contributors.
Thunderbird support added in version 0.6.4.
For Thunderbird, the main window, the compose and addressbook windows can be customized too.
Flock and Sunbird support added in version 0.7.0.
Older versions can be found in the download section