There's a bug in Magento's downloader which sets the file permissions to files it has installed to 777. On our servers, we run suPHP for security. suPHP will give you a 500 error if the file you're accessing is writeable by anyone but your user id.
See this bug report
http://www.magentocommerce.com/bug-tracking/issue?issue=1780
You can avoid the 500 error by setting the permissions on the directory to 755 instead.
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