During normal browsing, grey out most of the URL except the registered part of the domain. When focus moves to the location bar, the whole URL is shown normally so you can edit it.
That's it. It has minimal usability cost while making it much easier for people to pick out what the "real" domain name is. This won't eliminate phishing, but those who care enough to glance at the URL will be a little better protected from misleading domain names.
Try out a mock-up of the new design here.
I'm proposing this as an alternative to what's currently being discussed (see Bug #366797) as the new location bar for Firefox 3:
Basically, i think what's being discussed is too complicated, and i want to go for the smallest possible change that will help users find the correct domain name. (By the "registered part of the domain" i mean the domain name you would buy — for .com that's two levels, for .co.uk it would be three levels, and so on.)
(Also feel free to participate in the discussion on mozilla.dev.apps.firefox.)