This is the auto-upgrader.
When updating themes:
An error occurred while updating Twenty Eleven: Download failed. Destination directory for file streaming does not exist or is not writable..
When updating plugins:
An error occurred while updating A5 Custom Login Page: Download failed. Destination directory for file streaming does not exist or is not writable..
On one of my sites, prior to upgrading to 3.5, I tested updating both plugins and themes. No issue. After upgrading to 3.5 I am having this issue. I’m running IIS7. And yes, the IUSER account is set, as per previous troubleshooting steps for the same issue in previous versions of WordPress.