On my new Dell Inspiron 1525N that was pre-installed with Ubuntu 7.10, Firefox has been using the wrong dictionary for spell checking. I'm not sure if this is a problem on standard installs, or just the Dell install, but here's the quick and easy fix:

In the address bar, go to "about:config" and search for "spellchecker.dictionary". Chances are, it's set to "de-AT". If you are an English speaking individual in the United States, this should actually be set to "en-US", so simply double click on the value and change it as such. If you want/need a different language for the spell checker, use your language code. Remember not to the underscore between the language and region code. ("en_US" will not work and will reset to "de-AT" or the last usable setting once Firefox is closed.)