I couldn't find a solution on this problem yet. Eventhough it's almost one year old, it still appears. Hopefully someone could help!
Full text of error reads:
FTP credentials don't allow to write to file /home/xxxxx/public_html/.htaccess
W3 Total Cache Error: Files and directories could not be automatically created to complete the installation.
Please execute commands manually [button: view required changes]
or use FTP form to allow W3 Total Cache make it automatically. [button: update via FTP]