Hello guys, this is a long time..... problem for me. but today i want to know the solution for this. when i am trying to upgrade my wordpress blog is always showing... Downloading update from http://wordpress.org/wordpress-2.9.1.zip. Unpacking the update. Thats it.., and stops..., what i have to do....
it's not updating your database yet. It's stuck in the unpacking part. What I do is remove the wp-content/upgrade folder and do it again. But the more effective way is to unpack the zip file from my local and ftp the files. That's a sure way. By the way, your problem has something to do with the permission. I get this problem with one of my hosting but don't encounter this in another. But since I have access to SSH on my server, I just do it from there. lot, lot faster!
As scaredcrow mentioned it is stuck in the unpacking part. Either the perms are causing a problem when it tries to move the plugin and can't overwrite an existing file. There is already an existing download in the wp-content/upgrades directory that didn't get moved and that's causing the problem. Delete the contents of the upgrades directory and try again. If it still doesn't work, download the plugin local and then ftp it to the wp-content/plugins directory. (Sexybookmarks does this to me every time I try and upgrade it).