I've posted more detailed description in Alpha/Beta forum, so here's the essential.
If WordPress auto-update or plugin update says "Could not create directory" and nothing else helps and you have AskApache Plugin installed, try this:
Open wp-adminadmin.php and change these lines:
!defined('FS_CHMOD_DIR') && define('FS_CHMOD_DIR', (S_IRWUGO & ~ umask()));
!defined('FS_CHMOD_FILE') && define('FS_CHMOD_FILE', (S_IRWXUGO & ~ umask()));to these:
!defined('FS_CHMOD_DIR') && define('FS_CHMOD_DIR', (S_IRWXUGO & ~ umask()));
!defined('FS_CHMOD_FILE') && define('FS_CHMOD_FILE', (S_IRWUGO & ~ umask()));