• Commands should use the localized version, if available, only when ubiquity too is localized. If the english language version of ubiquity is installed, commands should also be in english (so Firefox's locale is not relevant here)
• I don't see any benefit to option 2 versus option 3. Option 3 is simpler to the localizer and to the user.
  
  • A hybrid solution would probably satisfy everyone (but this 'solution' really has some holes in it that need to be thought out): by default command localizations are installed and updated from herd, but a user can install an alternative localization that will then become the used localization and the user's ubiquity install then ignores the one on herd (some sort of 'reset localization' button would be required to return the ubiquity install to the herd l10n).

• I think the Herd needs to be involved somehow, so localizations can be automatically found. Speakers of languages other than the original command should never have a sub-standard experience by needing to manually search the web for localizations.

• There's also the issue of multiple people writing separate localizations for the same command, in the same language. I think the Herd can help here too, but providing a way for localizations to be ranked/rated, thereby providing some quality assurance.

I think Option 2 would be ideal, as we get the benefits of the Herd, while it still being a decentralized web-like model. Unfortunately, that's going to be more technically challenging to implement.