You need to correct the permissions on your wp-admin/includes directory. You will want to find out what the anonymous internet user is in IIS and set read/write permissions on that folder to that user. Its typically something like IUSR_[computer_name]. Details about how to set the permissions can be found here:
http://support.microsoft.com/kb/313075
[signature moderated Please read the Forum Rules]
Isnt that why it asks for the FTP user account for permission? Doesnt the above mean any anonymous connection can then change things on the website?
Actually you have to manually upload the them – at least on GoDaddy.com.
Here are their instructions:
You can use an FTP client to upload themes and plugins to the correct folder. We also provide a File Manager in our Hosting Control Center that allows you to upload .zip files and unarchive them on the server. This saves you the time of unarchiving them on your local computer and then having to create a folder on your hosting account.
To Upload Themes and Plugins Using File Manager
1. Download the theme or plugin you want to use. Keep the file in the .zip format.
2. Log in to your Account Manager.
3. From the Products section, click Web Hosting.
4. Next to the hosting account you want to use, click Launch.
5. In the Content section, select File Manager.
6. Browse to the wp-content folder and open either the themes or plugins folder.
7. Click Upload and then click Browse to locate the theme or plugin you want to upload.
8. Click Close after the file uploads.
9. Select the file you uploaded and click Unarchive.
10. Leave the Select Destination field unchanged and click OK.
