A quick note for myself and anyone else who is having headaches with this.
Xmarks is a very useful bookmark synchronizing service, but I have had problems with it lately. If you are using the Firefox version of Xmarks, first update. As of this writing (6/15) the latest Xmarks update is 4.3.1; note that this is not the version showing on mozilla add-ons which is still 4.2.1. Make sure you get the most current version, and it will solve many problems.
But not all. The Xmarks profile feature is especially convenient; I use 2-4 computers every week (home, office, laptop, school) and there is no way I want to have all the bookmarks on my home computer installed in my laptop browser if I can avoid it. A profile allows you to choose a subset of your bookmarks for automatic synchronizing, which is what I want. However, this can sometimes cause trouble. Even with the latest version of Xmarks, I frequently get the “excluded password” error (see here). In my case this is not related to passwords at all, but to bookmarks that the profile function cannot handle.
In particular, if you are editing bookmarks on one computer and set the profile to exclude a bookmark that is present on another computer using the same profile, the second computer will throw the “excluded password” error. You cannot fix this by ordinary synchronizing, and you cannot fix it by changing the profile. Both will give errors. Instead, the first thing I do is go to the “advanced” section under the Xmarks options and choose download (“force overwrite of local data”). Now you should be able to change profiles. I always set the profile to “none” and synchronize (may not actually be necessary). Then I go back and choose the profile I really want. This usually resolves the problem.
Sometimes, however, I get messy situations where the bookmarks I have on my browser after synchronization still include bookmarks from the folders I excluded from the profile. I am working on this. One theory I have is that it is related to duplicate bookmarks; if you have duplicate bookmarks, one in an excluded folder and one in an included folder, it seems to cause problems sometimes. But it doesn’t seem to explain all the problems I have. More on this if I figure out anything else.