When upgrading WordPress you may receive the dreaded Error 500 – Internal Server Error:
Don’t Panic. This usually means that the files you uploaded did not completely replace their predecessors.
Check your FTP settings and tell your FTP program to OVERWRITE existing files on the server. Some thing like this:
I usually have my Uploads option set to “Overwrite if Source Newer” but I have seen this cause problems when uploading WordPress revisions like WordPress 2.7.1 so I change it to “Overwrite” when upgrading the files.
Re-upload the files, refresh your admin panel and breathe a sigh of relief.