There are two ways to install plugins in WordPress 3.0. You can either search for and install plugins via Plugins/Add New in your admin panel, or search for and download plugins from the plugin directory, then upload them to /wp-content/plugins/. Now, thanks to Mark Jaquith, there’s a new way to install plugins.
The new plugin installer tool allows users to easily install plugins via a web-based interface outside of WordPress, with no FTP knowledge or tedious admin panel searching required. The new tool will be officially rolled into the plugin directory during WordPress’ impending site-wide redesign. For now, plugin developers can create a link directing users to the plugin installer tool and their plugin, and the rest of us can use the bookmarklet to install plugins from the directory.