Dear all,
For everyone who has faced the problem:
Unable to install new plugins or themes or upgrade to the latest version of word press.
I faced similar problem.
I was not able to install new theme, or upgrade to the latest version. I thought this was linked to me using an older WP version. When I clicked on upgrade to the latest wordpress version, it stopped at: 'Unpacking the update'.
The problem was:
The file wp-admin/includes/files.php
Modifies the php variable 'memory_limit' to 256Mb. This means, you should have 256Mb space available on your web hosting - slightly unrealistic for small space hosting users.
I commented out this piece of code in this PHP file and everything was running back smoothly.
I hope this helps out people!
Cheers.