I did some more searching and have been trying random things I see associated with 1and1. I applied this fix and suddenly I am able to download plug ins with no problem.
https://www.ads-software.com/support/topic/1and1-hosting-and-uploading-wordpress-31
“Well, I use 1and1, one of their linux business servers. I have been running 3.1 RC2 for a while. To get past the PHP5 thing I had to create a file named .htaccess in the top directory of wordpress and give it the following code.
Options All -Indexes
AddType x-mapp-php5 .php
# BEGIN WordPress
# END WordPress
Note that the name begins with a ., which you can’t do in windows. I had to name it txt.htaccess, ftp it up, and then change its name.
That worked. For RC2. I have yet to be able to upgrade to 3.1. I think they have screwed the pooch.”