Actually it is on windows xp
hey I found something
Firefox stores your password data in two files: key3.db (Master Password / Encryption key) and a "signons" file (encrypted names and passwords). You can back up your passwords by making a copy of both "Key3.db" and the "signons" file for your Firefox version. Firefox 2 uses signons2.txt, Firefox 3.0.x uses signons3.txt, and Firefox 3.5 and 3.6, including current Beta and nightly builds, use signons.sqlite.  See Profile folder - Firefox and Profile backup for additional information.
mine is latest and it has signons.sqlite instead of those text file. I opened it with notepad and I can see the sites for which passwords are saved but username and password are encrypted
But the problem is solved for now . All I have to do is replace it