I’m also having this problems. I’m installing WP 2.5 and my wp-includes and all internal folders have 755 perms and all internal files have 644 perms and I’m still getting the same error trying to install it.
wp-setup-config.php is having the problem and it’s basically saying it doesn’t have permission to open the required compat.php.
PHP Warning: require_once(../wp-includes/compat.php) [<a href='function.require-once'>function.require-once</a>]: failed to open stream: Permission denied in <HIDDEN HOST STUFF>/wp-admin/setup-config.php on line 7
Do you still think this is a permissions thing or possibly something wrong with my server configuration? I’ve spent about four hours now googling possible solutions but have yet to find one that works.