If I download and install firefox 2.0, will my extensions work or will I need to download firefox 2.0 versions of them?
It depends on rather or not the author of each extension made them compatible Firefoox 2.0. Most of them are already compatible, but some still have not been updated yet. You would have to go to the Firefox Add-ons site and check each one individually. If it says the extension works with 2.0.0.x or higher, then you can upgrade without any problems. If an extension is not compatible with the latest version and you install Firefox anyway, it will just be disabled until an update for it is available.