See here for confusing reading:
standards.freedesktop.org/.../...-0.9.4.htm\
l#legacy-mixed
About half-way down the page is: List of valid Exe parameter variables

The %u in firefox (or other launchers) seems to be depreciated, but I
think (from what I had read) that it is intended to allow drag and
drop opening of a single file onto the launcher. Coincidentally, this
works currently with or without the %u, which is why I am thinking
that it is depreciated (if that word is right... I don't do so well
with big words!). However, If you replace with %U, then restart
gnome (killall gnome-panel), you can highlight several files and drag
and drop them onto the launcher, and they will all open. If you try
that with the little "u", you will open the first file, and get an
error message on the second. At least that's what my system does.