Unable to install themes or extensions - Firefox
From MozillaZine Knowledge Base
You may not be able to install or update Firefox themes or extensions for a number of reasons, including:
Extensions and themes are designed to work with certain Firefox versions. Attempts to install incompatible extensions will result in an error alert saying, "<Extension Name> could not be installed because it is not compatible with Firefox <x.x.x.x>. (<Extension name> will only work with Firefox <x.x.x.x>)".
Extensions that have been installed by turning off compatibility testing with extensions.checkCompatibility set to false are clearly marked in the Add-On listing with a white exclamation point on a red background overlaying the lower left corner of the icon associated with the add-on.
Incorrect user agent
Your browser user agent may be incorrect, causing the add-ons site to report that the extension is for an older version of Firefox or that you must upgrade Firefox to use the add-on. . If you are using an add-on such as User Agent Switcher, restore the default user agent (or restart Firefox). Otherwise, open about:config and enter general.useragent in the filter box. If any of the general.useragent preferences are shown as user set (they will be in bold type), open the context (right-click) menu and select "Reset" to restore the default setting. Note that some extensions, including MegaUpload Toolbar and Microsoft .NET Framework Assistant, add an extra user agent string.  
Software installation disabled
Websites are only allowed to prompt you to install an extension or theme if you have the functionality enabled and if you have allowed that specific site to do it.
Enabling software installs
Some users may have disabled the software installation option based on security issues which have since been resolved . To re-enable:
Firefox 1.5: If you previously disabled this option and then updated to Firefox 1.5, the disabled setting will be carried over but the option to enable software installation will no longer exist in the user interface. If you see a yellow message bar that says "Software installation is currently disabled. Click Edit Options... to enable it and try again." you will need to:
Allowing the site to install
When a site that's not allowed to prompt you to install software attempts to do so, you'll receive a yellow bar that says:
To allow the site to prompt:
Firefox 3 and above: Starting in Firefox 3, if an add-on does not provide a secure method of auto-updating then, by default, Firefox will refuse to install the add-on. If you have add-ons already installed that are insecure in this way, they will be automatically disabled.  Add-ons from AMO and other secured sites are not a problem; for add-ons that do provide a secure updating method, advanced users can add the preference extensions.checkUpdateSecurity and set it to false (not recommended). See this article and bug 378216 for more information.
Downloaded theme or extension will not install
Some web sites offer the option to download a theme or extension instead of installing it. The downloaded file will have a ".jar" or ".xpi" extension. Do not try to open these files directly. After the download is complete, drag the downloaded .jar or .xpi file icon from the desktop (or other location) and drop it onto an open Firefox "Add-ons" window ("Extensions" or "Themes" window in Firefox 1.5 and earlier).
Note that the installation may fail with no user feedback if software installation is disabled (see above).
Download Error -228
This error message may be caused by having the Firefox cache disabled. To re-enable:
Make sure the cache is at least 1 MB (50 MB is the default setting).
On Mac OS, this error can occur if the ~/Library/Caches/TemporaryItems folder is not writable. To change the permissions, context click (right-click) on the "TemporaryItems" folder, choose Get Info and, under Sharing and Permissions, change your user permissions to Read & Write. This problem can be caused by a bug in the WASP extension, which is now fixed in the current version.  
Firewalls or spyware screeners may also cause this issue. If you use the CA firewall, Windows Defender, or the resident option of Spybot S&D ("Teatimer" feature), temporarily disable it to see if your system will now allow the extensions or themes to install .
Failing that, a workaround is to right-click the download link, select "Save Link As..." and download the .xpi or .jar file to your computer. You can then manually install it by dragging the file icon onto an open Firefox window .
Note: The Download Error -228 message may also be seen if the required .xpi or .jar file is not actually present on the server site. You can simply try again at a later time or check other download links on both the same site and a different site, before assuming that your own setup is at fault. 
Another solution is disabling Network Monitor Driver. On Windows XP go to Control Panel, Network Connections, Right click your connection, Properties, uncheck network monitor driver, hit ok.
Invalid file hash
If you receive the error, Firefox could not install the file at <URL> because: Invalid file hash (possible download corruption) when clicking an "Install" link, try the following:
Note: This error can also occur when installing an "experimental" extension from AMO. See this bug report for details.
Corrupt extension files
Files that store information about the extensions you have installed can sometimes be corrupted. Deleting them can fix a number of extension issues; they will be regenerated the next time you start Firefox. . Exit Firefox completely, then open your Firefox profile folder (read the linked article for its location) and delete* these three files:
Unexpected installation error -203
Installing themes or extensions may fail with the message, Unexpected installation error -203. (If this occurs after a Software Update you may find that add-ons that were previously installed also do not work.) Follow the above directions to remove corrupt extension files.  If the problem is not resolved and you use ZoneAlarm or CA Firewall, disable it temporarily (enable Windows Firewall in the interim) to allow the installation.  If the problem persists, your profile may be corrupt (bug 361358). Use the Profile Manager to create a new profile  or create a new default profile  and then transfer your data to the newly-created profile.
Extension not installed after restarting - Firefox 1.5
If you get a dialog box to confirm installation but the extension isn't listed after choosing to install (or if you update an extension but it's still the previous version after restarting), exit Firefox. Go to the Firefox profile folder and look inside the "extensions" folder. If you find a staged-xpis subfolder, delete it. Reopen Firefox and try again .
Conflicts with other extensions
Another installed extension may interfere with the installation of new extensions. Install the new extension in Firefox Safe Mode as a workaround.
All-In-One Sidebar extension
You may not be able to install new extensions if the All-In-One Sidebar extension is installed. Uninstall and reinstall the latest version of this extension and disable the opening of the extensions window in the sidebar .
Conflict with Windows High Contrast - Accessibility options
It seems if you are using Windows Accessibility options to adjust your Display to a High Contrast resolution, you may not be able to activate your themes . To work around this, you should be able to deactivate the High Contrast, install the theme, select the theme, restart Firefox and then reactivate the High Contrast.