Pressing the Red Button

If you received the following error when trying to update a Firefox extension:

Firefox could not install the file at
“filename.xpi”
because: Invalid file hash (possible download corruption)
-261

Here are three possible fixes:

1) Clear your Browser History, Browser Cache and Cookies
You can do this from the menu by clicking Tools -> Clear Private Data. Select Browsing History, Cache and Cookies. Then “Clear Private Data Now”.

Clear private data in Firefox to fix error message.

2) Manually Upgrade/Install the Extension
This is done by right clicking on a download link for the extension, and clicking Save As. Save the file to your desktop. then drag the file to a Firefox window.

3) Disable and Enable the Extension
From the Add-ons window, highlight the extension and click the Disable button. Restart Firefox, re-enable and Restart Firefox again.

Option 1 worked for me. Option 2 should always work. Option 3 is kind of a stretch (but worked in some user cases).