In Firefox 1.0.x the option to allow web sites to install software is found under "Tools -> Options -> Web Features -> Allow web sites to install software". Starting in Firefox 1.5 the option has been removed from the user interface (UI). The software installation option must be enabled to allow installation of themes, extensions and certain plugins that use the XPInstall method.
If you click a web site's "Install" link and you see a message bar that says "Software installation is currently disabled. Click Edit Options... to enable it and try again.",
(Some users may have disabled the software installation option based on security issues which have since been resolved . To reassure, software cannot be automatically installed without first being granted permission via the "OK, Cancel" installation dialog, which has a two-second delay before you can select "OK".)
Note: Updating of themes and extensions
will hang indefinitely, with no user feedback, if software installation
is disabled bug 288054.
More possible reasons at: