I have been trying to upgrade from V04.09.00 to every incremental version through to now V05.04.01, each time with different errors and of course, no success. :(

This was the last hint I got for the upgrade, which I followed with this attempt:
"We have figured out that the cause of the CorePermissionProvider installation error is that web.config changes that were supposed to happen in the 5.1.0 upgrade are not happening for some reason in a few cases (1 or 2 reported so far). We have added some extra logic to the core permission provider to handle that scenario so the provider will install properly, even if the web.config changes don;t happen properly. However we haven't yet determined why the web.config changes don't happen in a few cases. The only thing we can think of at the moment is that the NETWORK SERVICE account does not have access to the Install/Config folder where the "merge" files are stored. Can you check the permissions on that folder - this is a new folder in 5.1.0."

This attempt generated the following error, any ideas what it is and why it was generated? 

"Compilation Error Description:
An error occurred during the compilation of a resource required to service this request. Please review the following specific error details and modify your source code appropriately.

Compiler Error Message: BC30002: Type 'Web.HttpResponse' is not defined.

Source Error:

Line 32: Implements System.Web.IHttpHandler
Line 33:
Line 34: Private Sub RenderToResponseStream(ByVal Response As Web.HttpResponse, ByVal controller As XmlController)
Line 35: ' save script timeout
Line 36: Dim scriptTimeOut As Integer = HttpContext.Current.Server.ScriptTimeout

Source File: C:\inetpub\wwwroot\iis\dotnetnuke\wwwroot\App_Code\XML\Handlers\download.vb Line: 34"

Any and all help/suggestions appreciated. I'm thinking I might never get this site upgraded. :( 

WOW! What a speedy reply!! THANK YOU VERY MUCH!!!!

I have a couple of questions though...I have already restored the site back to the 4.09 version. So, am I readying your reply properly to interpret what you are saying is the now, with the site back to V4.09, I am to delete  all files from /app_code.xml folder and go to the host::Extensions menu and "install available extensions"?

Your clarification is appreciated.

And again, thank you!

JK