Upgrading WP error

I’m trying to run the auto update to 2.8.2. I have no problem with my blogs that I host elsewhere, but the blogs on our own server give an error that says:

Error: There was an error connecting to the server, Please verify the settings are correct.

Server OSX Leopard

We tried turning FTP on, but it still didn’t work. Any ideas how to configure so that we can use auto upgrade?

Thanks.