Steps to Correct Plugin Upload Problem in Wordpress 2.8
Follow the steps below to fix the problem with not being able to install plugins.
1) Download the following file to your desktop. Just right-click on the link below and choose Save As to save to your desktop
New Version of http.php for Wordpress 2.8
2) Once the file has been saved, open your FTP program and log into your site
Transfer the file http.php into your WP-Includes subdirectory in
Wordpress. I used a free ftp program called FTP Commander to transfer
the file into the wp-includes subdirectory. Then I closed the FTP
4) Now log back into your Wordpress Control Panel and try to install a new plugin. This simple fix worked for me.
Not all Wordpress 2.8 installations are experiencing this problem,
however for the ones that do have an issue, this fix worked and the
ability to download and install plugins was restored.