The Lightning extension is for Thunderbird and SeaMonkey, not Firefox. The message you got is because you tried to install it in Firefox and not Thunderbird.

https://addons.mozilla.org/en-US/thunderbird/addon/lightning/

Right-click and Save the lightning-1.1-tb+sm ... .xpi extension to disk.

In Thunderbird, open the extension manager using the Tools menu and clicking the Add-ons menu item. Click the Install... button in the lower left hand corner of the Add-ons box. Locate and select the file you downloaded and click OK Close and re-open Thunderbird to finish the installation.

James i have the Thunderbird 9.0.1 program installed on my Win7 Home x64 and it too will Not let me install Lightning 1.2, even from a file. A major bummer.

On the Lightning 1.2 Download page there is a message that ver 1.2 is actually for Thunderbird 10 (which is beta now i think) and if youre using 9 to install Lightning 1.1 instead, here's the reference page and there's a link on it to get to Lightning 1.1 https://addons.mozilla.org/en-US/thunderbird/addon/lightning/

James's solution worked for me but with one small correction. The link below will take your directly to the page were you can download lightning 1.1.1 which is compatable with Thunderbird 9.0.

https://addons.mozilla.org/en-US/firefox/addon/lightning/versions/?page=1#version-1.1.1

Once on this page right-click the download link/button and select "Save Link As..." Save the file (lightning-1.1.1-tb+sm-linux.xpi) were you can find it again.

In Thunderbird, open the extension manager using the Tools menu and clicking the Add-ons menu item. Click the "Tools for all add-ons" dropdown next to the search box and select "Install Add-ons From File". Find the file (lightning-1.1.1-tb+sm-linux.xpi) and click open. You will need to restart Thunderbird.