I liked using the up/down arrow keys for smooth scrolling. They do not seem to do this any more. Instead, they seem to move a cursor like in a word processor. The only thing is that due to many page layouts, pressing down arrow goes straight to the end of the document.

Also, because of this stupid "cursor" thing, I often see pages with a long blinking vertical line on the left of the layout. This is just plain distracting.

Spoke too soon!

It appears that if you go to Tools->Options then click on Advanced and select the General tab, there is a check box "Always use the cursor keys to navigate within a page". Uncheck this and it scrolls with the arrow keys just as it used to.

You toggle caret browsing, as that feature is called, with the F7 key.

See http://kb.mozillazine.org/Scrolling_with_arrow_keys_no_longer_works