You may find this error message when you attempt to install a template or extension via your Extensions Manager. Unfortunately it is quite a common problem and is usually related to directory read/write issues on your server causing Joomla to be unable to create the files and folders necessary to install your template/extension.

It stands to reason that for Joomla to be able to create these files and folders it needs the permission to do so on your server. To check that Joomla has the necessary permissions, navigate from within your Joomla administration to System -> System Information -> Directory Permissions. All files and directories listed should be writable If one or more files or folders are marked as 'unwritable' you are likely to have some issues when it comes to permissions.

One solution is to activate the Apache module suPHP on your server. suPHP is a tool for executing PHP scripts with the permissions of their owners. If you are unable to do so you can ask your host administrator to activate the module for you or if unavailable suggest an alternative solution.

Another possilble solution is to change the CHMOD settings of your folders manually. This can be done via FTP access or through your server admin panel (cPanel). Locate the folders listed as unwritable and set these to 755. Try an avoid setting your folders to 777 as this can cause some severe security issue.