Symptoms
The following error message is shown on attempt to install extension in Magento 1.5 or Magento 1.6 version:
Invalid server response for http://magento-community
Cause
The reason is that Magento Connect 1.0 extebsion key is used instead of version 2.0.
Solution
Since Magento 1.5 version you need to use Magento Connect version 2.0 extension keys for extension installation.
Please refer to How do I install Magento module / extension via Magento Connect article for detailed instructions.
Magento Connect v2.0 extension key have the following form:
http://connect20.magentocommerce.com/community/ExtensionDeveloper_ExtensionName
or (in a short form):
community/ExtensionDeveloper_ExtensionName
instead of 1.0 version:
magento-community/ExtensionDeveloper_ExtensionName
To get Magento Connect version 2.0 key you need to select the 2.0 version at the extension page on MagentoConnect site: