Go to Tools > Clear Private Data > choose Saved Form and Search History > click Clear Private Data Now.
To have the feature disabled permanently, there are two ways to fix it as far as I know
1. Tools>Options>Privacy> look into the clear history when firefox closes options (this will do same function as what Kpac mentioned but it will always do it when you close firefox so upon restart of firefox, nothing is remembered)
2. Tools>Options>Privacy, make sure Remember Search and forms history is unticked, also in same box, at very end, "When using the location bar", select none in the drop down box and location /address bar will not suggest anything from history or bookmarks.
Also, above instructions assume you are using firefox 3.5 (the latest version) and so firefox won't remember anything. And option 2 is bit better because if you don't close firefox somebody can still see the suggested/remembered things until firefox has been closed.