I seem to be having a simlilar problem to this post.http://www.nbill.co.uk/forum/index.php/topic,525.0.html
I am using Joomla 1.5 and have enabled the legacy mode.
I have then gone into Extentions > Install / Uninstall and selected Browse and located the zip file for upload.
Once the upload commences Joomla ticks away for a few moments but then i just get a more or less standard error from Internet Explorer:
Internet Explorer cannot display the webpage
Most likely causes:
You are not connected to the Internet.
The website is encountering problems.
There might be a typing error in the address.
What you can try:
Diagnose Connection Problems
I tried adding the command "set_time_limit(300);" into /administrator/index.php but i still get the same message. The Components folder is also set to CHMOD 777.
Can anyone please point me in the right direction please as I dont seem to be getting a very useful error message when the upload fails.