Magento Connect Downloader gives Internal Server Error

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

You can avoid the 500 error by setting the permissions on the directory to 755 instead.
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