On my Mac, Firebug 2.0.8 seems to stop at breakpoints OK, but I'm still back on Mac Firefox 34. There does seem to be a problem with only some of the expression hover tooltips working, but mostly it seems OK.
In my Windows 7 VM, with Firefox 35.0.1, Firebug 2.0.7 (in a separate window) stops at the first breakpoint and then essentially freezes -- won't step into, step over, or play to end, no matter what I do. However, when Firebug is docked to the bottom of the main window, it behaves normally. Very strange.
After updating Windows Firebug to 2.0.8, it freezes at the first breakpoint no matter what I do, regardless of whether FB is in a separate window or docked to the bottom of the main window.
Looks like I was right not to update Mac Firefox to version 35. Now I'm going to tell VMware to roll my Win7 VM back to the last saved snapshot, so I can (hopefully) get Firebug 2.0.7 back, which is only partially broken.
If a few different people here are having similar problems, I have to wonder whether Firebug breakpoints are even being tested before new versions are rolled out.