I have similar problems, I still have two sites; one using WordPress 2.5.1 and another one using 2.6
The 2.5.1 cannot seem to automatic upgrade the plugins from the dashboard.
It always says something like this:
Downloading update from ……
Unpacking the update
Could not copy file
Any insights?
I’ve tried the following solutions as other people have suggested:
1. Add the FTP account and put it on the config file (http://blog.noizeramp.com/2008/09/10/wordpress-unable-to-locate-wordpress-plugin-directory/)
2. chmod the folders to 777
Nothing works yet …
My automatic plugin update still did not work after I created an FTP account and have it remembers in the config.php
Downloading update from http://downloads.wordpress.org/plugin/google-sitemap-generator.3.1.4.zip
Unpacking the update
Could not copy file