Just thought I'd pass along the answer to a problem I've been working on ALL day long.
Hosting: Network Solutions
Default WP Install w/ "one-click": 2.9.2 (same w/ 3.0.1 upgrade)
Problem: Cannot upgrade themes or plug-ins
Login to your Network Solutions account
Select the hosting product you have WP on
Click the <Manage> button (for Hosting control panel)
Click FTP Content / Publishing
Click Reset File Permissions (bottom left icon)
Seems the problem with theme and plug-in upgrades is related to FTP file permissions, which cannot be changed using an FTP client or overridden w/ the WP-config file. (At least I couldn't get either method to work.) However, once the proper change is made within your NetSol hosting account, you should be good to go.
This worked for me - your mileage may vary - hope it helps...