Hmm, thats a weird combination of things working/not working. The only time I have seen something similar to what you describe is when I had ff3 and ff2 both installed and it would find the wrong run-mozilla.sh script, or something like that, I dont remember exactly.
Im sorry I cant be of more help tracking this down. If conduit works on your distribution without the wrapper script then the packagers are welcome to remove the wrapper, like I am going to recommend is done in ubuntu 8.04 conduit package -it seems to be no longer needed with ff3/gecko 1.9