Clients WP is requesting ftp details to upload plugin

Client's site is requesting ftp details to upload a plugin. Another site of theirs hosted by same host is not asking for this (I assumed it was something specific to the hosting co). Running WP 3.2. Site built in Builder. I've never seen this ftp request before, but am fairly new to building sites for clients.

Any ideas please? Clients site is

When attempting to install plugin WP says:

"Connection Information
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."

The host name and FTP user name is pre-filled in correctly, but when the correct password is entered connection fails. The client has confirmed password etc with hosting co.

Is there a bug, virus?