USB devices share the bandwidth and USB controllers depend heavily on CPU which means that USB speed goes down as CPU usage goes up. Firewire on the other hand has dedicated controllers with DMA (Direct Memory Access) so they can skip the CPU while doing RAM reads/writes. Firewire interfaces also tend to be more reliable than their USB counter parts and have lower latency.
USB is OK for gadgets, MIDI keyboards, pointing/controller devices etc. but Firewire is better for devices that do a lot high-speed data transfer such as hard disks and multichannel audio interfaces. USB3.0 will be better than Firewire but it won't kick in big time until next year although a few devices are already available. Intel and Apple on the other hand are preparing an universal super high-speed optical bus called Light Peak which will probably kill Firewire. We might see Light Peak as soon as next year.
So, in a nutshell: Firewire is better for constant data flow (audio interfaces, hard drives) and USB is better for controllers, pointing devices, missile launchers, coffee cup heaters etc.