Posting in the Magento forums has been disabled pending the implementation of a new and improved forum solution which should better serve the community.
For new questions please post at magento.stackexchange.com, the community-run support site for the Magento community. We will be providing updates on the new forum solution soon. For questions or concerns please email email@example.com.
I had this problem with 1.1.8 so I upgraded to 1.2 hoping the problem would solve itself. I checked the perms on all the folders and they seem to be correct (755). Any ideas why a fresh install would have problems with the Downloader not working properly?