“Installation failed” when upgrading WordPress

After a few hours of trying to find a solution to the “Installation failed” error message, when using the automatic upgrade feature in WordPress, I finally found the/my solution.

The problem:

I’v tried to perform a WordPress 2.8 to WordPress 2.8.6 upgrade with WordPress installed in the website’s root folder.
Another installation of the same version located in a subfolder and used as a sandbox before updating the production installation, automatically updated without any error.

The solution:

The FTP account, used for the automatic upgrades, did in this case have the WordPress installation folder as it’s root folder.

Moving the wordpress installation to a subfolder and reconfiguring the domain settings solved the problem.