I found This nice howto via @meaningful. Looks like the howto is for older version of Twitterfox. Here goes how to do it on Twitterfox 1.8.1 (The version I use right now)

And I recommend you to update to Twitterfox 1.8.1 coz it’s really improved.

First go here:

<path to your Firefox profile directory>/extensions/twitternotifier@naan.net/chrome

[you'll learn howto find your Firefox profile directory (AKA folder) here. There are too many operating systems. I can't cover them all :P  ]

There is a file called TwitterFox.jar

Open it & go in to directory called content. There you’ll find the file called twitterfox.js, you better open it with a text editor.

In the top region of the file you’ll find TINYURL_CREATE_API variable. it is set to use tinyurl api by default. I edited it to use my favorite URL shortnet tr.im by editing it to look like this.

var TINYURL_CREATE_API = “http://tr.im/api/trim_simple?url=”;

You can repalce http://tr.im/api/trim_simple?url= with the API of your favorite URL shortner.

You need to restart Firefox for the changes to be effective.

Hope it works ;) . Anything not clear? Just ask in comments.

PS: You may not like to try this but I don’t give a shit :P .