Since upgrading to Firefox 8 the "Restore Previous Session" does not seem to work. Click on it but nothing happens.
"Restore Previous Session" does nothing after upgrading to Firefox 8. Tried restarting Firefox same thing. Restarted Windows and tried again but no change.
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The Restore previous session - Configure when Firefox shows your most recent tabs and windows help article may interest you. In the Troubleshooting section of the article you'll note the explanation for the need to close Firefox from the menubar:
File > Exit (on a Mac: Firefox > Exit)
rather than clicking the X at the top left of the window.
Firefox's browsing history is a database, and like all databases, needs to be closed explicitly rather than abruptly in order to avoid corruption.
Did you try the entry in Firefox > History > Restore Previous Session if you currently are clicking the button on the about:home page?