Plugin automatic update fails – WP 2.5.1

I have tried updating my plugins using the automatic update but no matter what I do it doesn’t go through. It fails connecting to the host.
I am using my ftp server host as provided by the hosting company, master username and password.
I also tried creating a specific ftp username and password just for the automatic update and that doesn’t work either.
Should I be using the database host, username and password instead?

Thank you,

FayeC