I’m using a modal popup with a login control (but just a textbox has same issue) which works ok in IE. When I test using Firefox the textbox will not get focus. I can’t place the cursor in the textbox however other controls (buttons and checkbox) work ok. The modal popup is being displayed via code behind or via button click with same issue and panel has an update panel surrounding the controls (textbox or login control). The site has a master page.
I am hope that someone has a workaround or at least some suggestions for this issue. 
Here is some sample markup which produces this issue...
<asp:Panel ID="pnlLogin" runat="server" CssClass="modalPopup" style="display:none;">
<asp:Panel ID="pnlLoginDrag" runat="server" Width="100%" Height="16px"
BackColor="LightSteelBlue" style=" cursor:move;">
<span>
<asp:Image ID="Image2" runat="server"
ImageUrl="~/Images/IconLib/security_16x16.gif" style ="float:left;" />
<asp:Label ID="Label1" runat="server" Text="User Security" style="float:left;">
</asp:Label>
<asp:ImageButton ID="btnLoginCancel" BackColor="transparent" runat="server"
ImageUrl="~/Images/IconLib/delete_16x16.gif"
style="float:right; cursor:pointer;" />
</span>
</asp:Panel>
<asp:UpdatePanel ID="UpdatePanel1" UpdateMode="Conditional" runat="server" >
<ContentTemplate>
<asp:Login ID="Login1" runat="server" TitleText="Login" LoginButtonText="Submit"
RememberMeSet="true" RememberMeText= "Remember me next time."
FailureText="Login failed! Please try again."
OnLoggedIn="LogedIn"
style="margin-left:auto; margin-right:auto;" ></asp:Login>
</ContentTemplate>
</asp:UpdatePanel>
<asp:Button ID="btnLoginNewUser" Text="New user registration."
BorderStyle="None" BackColor="transparent" OnClick="btnLoginNewUser_Click"
style=" background-image:url(Images/IconLib/user1_(add)_16x16.gif);
background-repeat:no-repeat; float:left; text-decoration:underline;
color:Blue; height:16px; vertical-align:middle; cursor:pointer;"
runat="server" />
<br />
<asp:Button ID="btnLoginRecoverPassword" Text="Recover my password."
BorderStyle="None" BackColor="transparent" OnClick="btnLoginRecoverPassword_Click"
style=" background-image:url(Images/IconLib/access_16x16.gif);
background-repeat:no-repeat; float:left; text-decoration:underline;
color:Blue; height:16px; vertical-align:middle; cursor:pointer;"
runat="server" />
<br />
<asp:Label ID="dummy" runat="server"></asp:Label>
</asp:Panel>
<asp:ModalPopupExtender ID="ModalPopupExtender" runat="server"
TargetControlID="btnLogin"
PopupControlID="pnlLogin"
BackgroundCssClass="modalBackground"
OkControlID="dummy"
CancelControlID="btnLoginCancel"
DropShadow="true"
PopupDragHandleControlID="pnlLoginDrag" />
Jerome C. Vernon