I was helping a friend with some small items in a WordPress install when I noticed that it was prompting me for a username and password to FTP in files.
That’s a pain in the neck that is caused when WordPress is installed in a way that doesn’t allow the webserver to directly access the installation. A great hosting company will always make sure that you don’t have that additional hurdle.
I use Tiger Tech (affiliate link) as my host for just that reason, they totally kick ass as a WordPress host.
If you’re currently being asked for FTP login information, you may be able to fix the problem so that it all just works. The key is getting file and folder permissions correct.

Different files and directories have specific permissions that specify who (or what) can read, write, modify and access them. You need to know this because WordPress will need access to write to files in your wp-content directory to make the magic happen.
If you are already lost because you have no idea what file permissions even means, stop reading this post, go read this, then come back.
Some of WordPress’ coolest features come from allowing some files to be writable by your web server.
All of your WordPress files should be owned by your user account, and should be writable by you. Any file that needs write access from WordPress should be group-owned by the user account used by the webserver.
In some cases your host will run the webserver as your account, so you can really lock down the files, but often the webserver runs as a special privileged user (www, apache, nobody).
All folder permissions should be set to 755. Files should be set to 644. Files that you want to edit in the WordPress Theme editor should be 666. Never use 777 for WordPress permissions.
If all this sounds like Greek, come join us at the Blogger Roundtable so we can get you straightened out.
Photo by: Transguyjay
This is one of the few succinct explanations about file permissions I’ve come across. Thanks, Phil.