If you have been attempting to install DNN and your installation hangs with the error "DNN failure 400 - access to the path XXX Denied" while adding/updating the database it's because of a permissions issue in the Access Control Lists (ACL) of the files. While the "file permissions" check on the previous page of the installation process may pass all the tests this does not necessarily indicate that you have the correct permissions.
From what we are reading at the DNN website, new versions of DNN are attempting to delete/modify the install files so they cannot be used/guessed by hackers. As such, the typical permissions needed to install DNN are insufficient. To fix the problem, your web hosting administrator must add "modify" permissions to the Network Service account on the files. This assumes you are using Windows 2003 Server and the IIS Application Pool for the site runs under that account. It is also suggested that while updating the permissions you select the option to "replace permissions on all child entires" with the selected permissions.
We are not sure if these permissions need to be maintained for use by modules or the normal operation of the application. They seem to grant more priveleges than needed. We will update this article when we have more information.
