When I was logged into WP (2.8.5) and I tried to install a new plugin (from the dashboard), I would get the following error:
“An Unexpected HTTP Error occured during the API request.”
Basically, according to WP user efree_unix,

The cause of error is too long in the process of requesting the API plugin in the wordpress server [...]

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I have been using WordPress 2.7.1 for a few months. In the very beginning of the first two months, I was able to upgrade the plugin, with some chances of failure. But lately, I was totally unable to upgrade the plugin in Wordpress through built-in FTP. It just failed miserably, with the message: Download failed.: [...]

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