When you want to install or upgrade a plugin, wordpress will display a message stating:
To perform the requested action WordPress needs to access your web server.
Please enter your FTP credentials to proceed.
If you do not remember your credentials you should contact your web host
This problem is solved by installing Vsftpd (Very Secure FTP Daemon) FTP Server.
The second problem is that you will have to enter the ftp credentials every time that you want to install or upgrade a plugin. To avoid this, open wp-config.php in notepad and enter the following information at the end:
define( 'FTP_USER', 'user' );
define( 'FTP_PASS', 'pass' );
define( 'FTP_HOST', 'ftp.domain or IP address:21' );
Use the FTP user name and password you created when installing vsftpd. For the ftp host, try with the domain name or the IP address. If you have secured the server by blocking permitting entry only through a specified port, enter the port number after the domain/IP address.
Now when you install or upgrade wordpress, it will not nag you for the ftp information.