A common issue is caused by the need for extensions needing to be installed via FTP through the Joomla! admin area. You can turn this on by following these steps:
In the admin area:
Click Site - Global Configuartion - Server
Click Yes on Enable FTP
In the FTP Host field, enter your FTP host. It's usually your domain name; for example, mysite.com, and it will be the same host you use to connect with an FTP tool.
In the FTP Port field, enter the FTP port. By default, this will be port 21.
In the FTP Username field, enter your ftp username.
In the FTP Password field, enter your FTP password.
In the FTP Root field, enter the directory in which Joomla is installed. For example, the default ftp directory is /home/username/www and Joomla is installed in /home/username/www, enter /www in the FTP Root field.
Click Save to save your Global Settings. Test to see if you can upload images in the Media Manager. If you can, you configured your FTP correctly.