Bookmarks toolbar is recording history.
Should the bookmarks toolbar also be recording the history of every website I visit and also adding an entry every time I visit the same site. It is making the tool bar impossible to use effectively.
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Firefox comes with a special smart bookmark folder called "Most Visited" that will give a view into your history (it should have a special blue folder icon with a magnifying glass on it). But otherwise, pages shouldn't appear anywhere in your bookmarks automatically.
Where do the new entries appear on the Bookmarks Toolbar?
If you click the blue star icon on the toolbar to edit the bookmark, and click the Remove Bookmark button, does it work? (If the icon is not blue, the current page isn't bookmarked.)
In case your Bookmarks Toolbar is displaying some items other than bookmarks, try using the "Restore Defaults" button on the Customize page to reset your toolbar layout. This article will get you into that feature: Customize Firefox controls, buttons and toolbars.
Any progress so far?