Does Firefox save both variations and let you choose from the drop-down, or does it recognize them as being the same?

Neither Firefox for the desktop nor Firefox for Android has a convenient user interface for removing saved form entries. On Firefox for desktop, you can use an extension to manage entries, but the ones I've seen are not compatible with mobile (probably due to their use of complex dialogs).

You can blow away all of the saved form autocomplete entries if you find no other option.

Firefox for Android menu > Settings > Privacy > Clear private data

You'll want to check "Form & search history" and uncheck the categories of data you want to preserve.

No, it doesn't save both versions. As soon as I type in the correct version it is overridden by the wrong one.

Obviously I would prefer not to trash all my stored form settings but it seems that this is the only solution in this. Since Android keyboards tend to default to capitalising the first letter of a sentence then I think this will be a fairly widespread problem, but I guess it's a relatively simple fix to make in the code.

I'm not sure how the code works for this, but you could file a "bug" to allow more control over the feature. The bug tracking system (which uses a different login than this forum) can be accessed here:

https://bugzilla.mozilla.org/

In the short run, can you force Firefox to save a second entry by going back to the field and correcting it by hand after autocomplete fills it with the capitalized version?

Unfortunately no. I can correct the case of the text but whenever i submit the form the autocorrect kicks in again and replaces the capitalised version before sending the data.

I'll submit a bug report and see what happens. But thanks for your input.