Fiddler does look interesting and I've seen people recommending it as a good debugging tool but a quick runthrough I don't see anything all that great that we dont already have in Firebug.
What can Fiddler do that Firebug cannot? Conversly what can Firebug do that Fiddler cannot?
Yes it can - it is capable of showing HTTP messages from any program, not only web browsers.
Last time I checked, Firebug wouldn't show you the raw initial request for page and a response; only xhttp requests that happen within the page, such as an AJAX/javascript call.
Also, there's more to http proxies than what happens in a browser. Fiddler can show you what's going across the wire between, say, a console application and a web service.
Fiddler is an extensible web-debugging platform which can be extended with any .NET language. It allows you to write pluggable inspectors to display traffic in a context-sensitive manner, and allows tampering with any request or response before it's sent or returned to the application. It has an "autoresponse" mechanism that allows you to replay previously captured or generated traffic, and can archive traffic to disk in a compressed, lossless format for later investigation.
See http://www.fiddler2.com/fiddler/help/video/ for some quick tutorials that show some of the features of Fiddler.
Firebug Lite is available for IE which is not so featured as Firebug is to Firefox. There is no YSlow available for Lite version as of now.
I prefer to go with Fiddler if it is IE and I have found the following advantages of it useful when compared to Firebug:
1) It is easy to know View state contribution with Fiddler add-on neXpert. Firebug+Yslow does not provide an easy way to know the % contribution. 2) Fiddler being a Proxy, it becomes easy to debug AJAX requests. Firebug can only trap XHR but fiddler can monitor any AJAX technique not just XHR. 3) Independent of the browser used. Can literally work with all browsers.
And if you need to explore DOM, you could always use tools like IE Developer Toolbar.