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When I Refresh a local page with Firefox (1.0) it hangs every other time I press Refresh.
Please give it a try, just load a local page (a very simple one is best) then press Refresh, on mine the progress bar on the status bar fills half way and the cursor has the hour-glass, but as soon as I press Refresh again it's fine, but then if I press Refresh one more time it hangs, and so on.
I'm using WinXP Pro (SP 2) and my system is clean and perfect.
Take care.