Index: includes/file.inc
===================================================================
RCS file: /cvs/drupal/drupal/includes/file.inc,v
retrieving revision 1.243
diff -u -p -r1.243 file.inc
--- includes/file.inc	15 Dec 2010 03:39:41 -0000	1.243
+++ includes/file.inc	20 Dec 2010 00:58:49 -0000
@@ -452,7 +452,7 @@ function file_prepare_directory(&$direct
     return FALSE;
   }
   // The directory exists, so check to see if it is writable.
-  $writable = is_writable($directory);
+  $writable = is_writable($directory) && drupal_is_executable($directory);
   if (!$writable && ($options & FILE_MODIFY_PERMISSIONS)) {
     return drupal_chmod($directory);
   }
@@ -2212,6 +2212,27 @@ function drupal_dirname($uri) {
 }
 
 /**
+ * Determines if a file or directory is executable.
+ *
+ * PHP's is_executable() does not fully support stream wrappers, so this
+ * function fills that gap.
+ *
+ * @param $uri
+ *   A URI or pathname pointing to the file or directory that will be checked.
+ *
+ * @return
+ *   TRUE if the file or directory is executable; FALSE otherwise.
+ *
+ * @see is_executable()
+ * @ingroup php_wrappers
+ */
+function drupal_is_executable($uri) {
+  // By converting the URI to a normal path using drupal_realpath(), we can
+  // correctly handle both stream wrappers and normal paths.
+  return is_executable(drupal_realpath($uri));
+}
+
+/**
  * Creates a directory using Drupal's default mode.
  *
  * PHP's mkdir() does not respect Drupal's default permissions mode. If a mode
@@ -2351,7 +2372,7 @@ function file_directory_temp() {
     }
 
     foreach ($directories as $directory) {
-      if (is_dir($directory) && is_writable($directory)) {
+      if (is_dir($directory) && is_writable($directory) && drupal_is_executable($directory)) {
         $temporary_directory = $directory;
         break;
       }
Index: includes/install.core.inc
===================================================================
RCS file: /cvs/drupal/drupal/includes/install.core.inc,v
retrieving revision 1.47
diff -u -p -r1.47 install.core.inc
--- includes/install.core.inc	19 Dec 2010 19:26:21 -0000	1.47
+++ includes/install.core.inc	20 Dec 2010 00:58:49 -0000
@@ -1571,7 +1571,7 @@ function install_check_requirements($ins
     // Otherwise, if settings.php does not exist yet, we can try to copy
     // default.settings.php to create it.
     elseif (!$exists) {
-      $copied = drupal_verify_install_file($conf_path, FILE_EXIST|FILE_WRITABLE, 'dir') && @copy($default_settings_file, $settings_file);
+      $copied = drupal_verify_install_file($conf_path, FILE_EXIST|FILE_WRITABLE|FILE_EXECUTABLE, 'dir') && @copy($default_settings_file, $settings_file);
       if ($copied) {
         // If the new settings file has the same owner as default.settings.php,
         // this means default.settings.php is owned by the webserver user.
Index: includes/install.inc
===================================================================
RCS file: /cvs/drupal/drupal/includes/install.inc,v
retrieving revision 1.150
diff -u -p -r1.150 install.inc
--- includes/install.inc	29 Nov 2010 04:45:10 -0000	1.150
+++ includes/install.inc	20 Dec 2010 00:58:49 -0000
@@ -884,7 +884,7 @@ function drupal_verify_install_file($fil
             }
             break;
           case FILE_EXECUTABLE:
-            if (!is_executable($file) && !drupal_install_fix_file($file, $mask)) {
+            if (!drupal_is_executable($file) && !drupal_install_fix_file($file, $mask)) {
               $return = FALSE;
             }
             break;
@@ -899,7 +899,7 @@ function drupal_verify_install_file($fil
             }
             break;
           case FILE_NOT_EXECUTABLE:
-            if (is_executable($file) && !drupal_install_fix_file($file, $mask)) {
+            if (drupal_is_executable($file) && !drupal_install_fix_file($file, $mask)) {
               $return = FALSE;
             }
             break;
@@ -997,7 +997,7 @@ function drupal_install_fix_file($file, 
           }
           break;
         case FILE_EXECUTABLE:
-          if (!is_executable($file)) {
+          if (!drupal_is_executable($file)) {
             $mod |= 0111;
           }
           break;
@@ -1012,7 +1012,7 @@ function drupal_install_fix_file($file, 
           }
           break;
         case FILE_NOT_EXECUTABLE:
-          if (is_executable($file)) {
+          if (drupal_is_executable($file)) {
             $mod &= ~0111;
           }
           break;
Index: includes/updater.inc
===================================================================
RCS file: /cvs/drupal/drupal/includes/updater.inc,v
retrieving revision 1.7
diff -u -p -r1.7 updater.inc
--- includes/updater.inc	1 Sep 2010 20:08:17 -0000	1.7
+++ includes/updater.inc	20 Dec 2010 00:58:50 -0000
@@ -307,7 +307,7 @@ class Updater {
     // Make the parent dir writable if need be and create the dir.
     if (!is_dir($directory)) {
       $parent_dir = dirname($directory);
-      if (!is_writable($parent_dir)) {
+      if (!is_writable($parent_dir) || !drupal_is_executable($parent_dir)) {
         @chmod($parent_dir, 0755);
         // It is expected that this will fail if the directory is owned by the
         // FTP user. If the FTP user == web server, it will succeed.
@@ -349,7 +349,7 @@ class Updater {
    *   If the chmod should be applied recursively.
    */
   public function makeWorldReadable(&$filetransfer, $path, $recursive = TRUE) {
-    if (!is_executable($path)) {
+    if (!drupal_is_executable($path)) {
       // Set it to read + execute.
       $new_perms = substr(sprintf('%o', fileperms($path)), -4, -1) . "5";
       $filetransfer->chmod($path, intval($new_perms, 8), $recursive);
Index: modules/system/system.admin.inc
===================================================================
RCS file: /cvs/drupal/drupal/modules/system/system.admin.inc,v
retrieving revision 1.326
diff -u -p -r1.326 system.admin.inc
--- modules/system/system.admin.inc	23 Nov 2010 02:54:13 -0000	1.326
+++ modules/system/system.admin.inc	20 Dec 2010 00:58:50 -0000
@@ -1672,7 +1672,7 @@ function system_performance_settings() {
   );
 
   $directory = 'public://';
-  $is_writable = is_dir($directory) && is_writable($directory);
+  $is_writable = is_dir($directory) && is_writable($directory) && drupal_is_executable($directory);
   $disabled = !$is_writable;
   $disabled_message = '';
   if (!$is_writable) {
Index: modules/system/system.install
===================================================================
RCS file: /cvs/drupal/drupal/modules/system/system.install,v
retrieving revision 1.530
diff -u -p -r1.530 system.install
--- modules/system/system.install	18 Dec 2010 00:43:04 -0000	1.530
+++ modules/system/system.install	20 Dec 2010 00:58:50 -0000
@@ -332,7 +332,7 @@ function system_requirements($phase) {
     if ($phase == 'install') {
       file_prepare_directory($directory, FILE_CREATE_DIRECTORY);
     }
-    $is_writable = is_writable($directory);
+    $is_writable = is_writable($directory) && drupal_is_executable($directory);
     $is_directory = is_dir($directory);
     if (!$is_writable || !$is_directory) {
       $description = '';
Index: modules/system/system.module
===================================================================
RCS file: /cvs/drupal/drupal/modules/system/system.module,v
retrieving revision 1.999
diff -u -p -r1.999 system.module
--- modules/system/system.module	15 Dec 2010 02:59:01 -0000	1.999
+++ modules/system/system.module	20 Dec 2010 00:58:51 -0000
@@ -2149,7 +2149,7 @@ function system_check_directory($form_el
     watchdog('file system', 'The directory %directory does not exist and could not be created.', array('%directory' => $directory), WATCHDOG_ERROR);
   }
 
-  if (is_dir($directory) && !is_writable($directory) && !drupal_chmod($directory)) {
+  if (is_dir($directory) && (!is_writable($directory) || !drupal_is_executable($directory)) && !drupal_chmod($directory)) {
     // If the directory is not writable and cannot be made so.
     form_set_error($form_element['#parents'][0], t('The directory %directory exists but is not writable and could not be made writable.', array('%directory' => $directory)));
     watchdog('file system', 'The directory %directory exists but is not writable and could not be made writable.', array('%directory' => $directory), WATCHDOG_ERROR);
Index: modules/user/user.test
===================================================================
RCS file: /cvs/drupal/drupal/modules/user/user.test,v
retrieving revision 1.111
diff -u -p -r1.111 user.test
--- modules/user/user.test	18 Dec 2010 00:56:18 -0000	1.111
+++ modules/user/user.test	20 Dec 2010 00:58:51 -0000
@@ -847,7 +847,7 @@ class UserPictureTestCase extends Drupal
     $picture_path = $file_dir . $picture_dir;
 
     $pic_check = file_prepare_directory($picture_path, FILE_CREATE_DIRECTORY);
-    $this->_directory_test = is_writable($picture_path);
+    $this->_directory_test = is_writable($picture_path) && drupal_is_executable($picture_path);
     $this->assertTrue($this->_directory_test, "The directory $picture_path doesn't exist or is not writable. Further tests won't be made.");
   }