After some weeks of being unable to upgrade one of my WordPress blogs using the automatic update, I was finally able to find a solution. If you are trying to upgrade to WordPress 3.2.1, using the automatic update and 1and1 is hosting your blog, then you should try the following (make sure you have tried doing the update after disabling all your plugins first):

1. Open your text editor and copy the following code:

memory_limit=40M

2. Save your file as: php.ini

3. Upload (FTP) to: the root directory of your blog (exactly where your wordpress blog lives)

4. Upload (FTP) again to: wp-admin (for example: wp-admin/php.ini)

5. You’re done! Try the automatic upgrade again and hopefully it will work this time.

There is a simpler method to try to get this working but it DID NOT work for me, but apparently worked for others:

1. Add this to your wp-config.php file:

define ('WP_MEMORY_LIMIT', '256M' );

2. Try the automatic upgrade again