Gemal reports that Google's Safe Browsing extension will be licensed under the MPL for Mozilla and will be checked into the Firefox trunk for consideration for inclusion in Firefox.
The design documentation at Mozilla's wiki describes how it would be implemented.
Sounds like a nice feature; IE7 already has this feature. I have it disabled because I believe the URL of every page you visit is sent to Microsoft. (Opera also used to send the URL of every page you visited to Google before they removed advertising)
From the wiki, it sounds like Firefox could either check against a local blacklist downloaded from the server periodically (no problem here) or through a lookup server. If they decide to enable the lookup server feature, I hope that it'll be a party such as Mozilla rather than Google which provides the lookup service as Google knows way too much about you already.
Site Advisor is a service which has got quite a lot of press recently and provides a very impressive service which will test websites for spyware, adware, spam and more.