I believe it's believable, that it's impressive, and that it's not a particularly useful number.
1. Believable. I have generally downloaded each security update to Firefox within a week (usually 1-3 days) of it's release. I've given the more major updates a little more time, but generally started using them within a couple months of their release. I use Windows and Mac OS, so I've downloaded almost every version at least 2x for my personal use. In this case, the number of downloads is many times the number of users.
2. Impressive. 1B downloads it a lot, I don't care what product you're talking about. Even though it doesn't tell you the actual number of users, it does tell you that it's popular. Also, as others noted, I download once and install it on multiple systems. I'm a computer networking consultant, and at many of my clients, we've installed Firefox without automatic updates. After we've tested it, I'll put one copy on the server (sometimes downloaded from Mozilla, other times from my flash drive using the download I did for myself or another client) and push that update to all the machines. In those instances, the number of users may far exceed the number of downloads, just the opposite of #1. Anyway you look at it, it's popular, and there are a LOT of users.
3. Not particularly useful number. See #1 and #2. All you can assume from 1B downloads and the # of versions releases is that the number of users is likely to be > 50M. How much > 50M is not anything you can predict from those numbers. Data from other sources (e.g. percentage of browser market at various web sites) suggests the number of Firefox users is hundreds of millions.
Personally, I think IE is wonderful, for Windows Update only. 😉
On a more serious note, if a non-Microsoft site requires IE, I generally won't use that site. I'll make an exception when it's something I must have (e.g. client needs it, etc.), but if it's not a necessity, I won't use IE and I won't support sites or products that require (or any other specific browser for that matter, the web is supposed to be standards based).