Try the add-on called Smart Bookmarks Bar. It not only reduces the bookmarks into just icons, but also shows the names when mouse-overed. It looks something like this:
[caption id="" align="aligncenter" width="300" caption="Ignore the fact that the pointer is not visible in the snap. It should be on the YouTube bookmark."]
![Smart Bookmarks Bar Smart Bookmarks Bar](http://techrightnow.files.wordpress.com/2010/05/capture.jpg?w=300)
So, download it and try it for yourself. It also has an option to auto-hide the Bookmarks Bar, but I had a little problem with folders and Live Bookmarks, when opening them in a new tab.
![Share/Bookmark](http://static.addtoany.com/buttons/share_save_171_16.png)