[Samsung Galaxy Nexus] jazzruby:
install-recovery.sh is an initialization script and is used by Superuser and SuperSU to execute the su daemon process which is what we're using in JB 4.3 to establish root (su) privilege.

SuperSU sets the immutable bit (chattr) on this file and this why the update fails.

Starting with line 1309 of the OTA updater-script where the failure/error begins and subsequently aborts at line 1320; everything past that, well....

Line 1308:
delete("/system/recovery-from-boot.p",
"/system/etc/install-recovery.sh");
show_progress(0.100000, 10);
ui_print("Unpacking new recovery...");
package_extract_dir("recovery", "/system");
ui_print("Symlinks and permissions...");
set_perm_recursive(0, 0, 0755, 0644, "/system");
set_perm_recursive(0, 2000, 0755, 0755, "/system/bin");
set_perm(0, 3003, 02750, "/system/bin/netcfg");
set_perm(0, 0, 0755, "/system/bin/ping");
set_perm(0, 2000, 0750, "/system/bin/run-as");
set_perm(1014, 2000, 0550, "/system/etc/dhcpcd/dhcpcd-run-hooks");
Line 1320:
set_perm(0, 0, 0544, "/system/etc/install-recovery.sh");
set_perm_recursive(0, 0, 0755, 0555, "/system/etc/ppp");
set_perm(0, 2000, 0755, "/system/vendor");
set_perm_recursive(0, 2000, 0755, 0755, "/system/vendor/bin");
set_perm(0, 2000, 0755, "/system/vendor/etc");
set_perm(0, 2000, 0755, "/system/vendor/firmware");
set_perm(0, 2000, 0755, "/system/vendor/lib");
set_perm_recursive(0, 2000, 0755, 0644, "/system/vendor/lib/drm");
set_perm(0, 0, 0644, "/system/vendor/lib/drm/libdrmwvmplugin.so");
set_perm(0, 2000, 0755, "/system/vendor/lib/egl");
set_perm(0, 2000, 0755, "/system/vendor/lib/hw");
set_perm_recursive(0, 2000, 0755, 0644, "/system/vendor/lib/mediadrm");
set_perm(0, 0, 0644, "/system/vendor/lib/mediadrm/libwvdrmengine.so");
set_perm(0, 2000, 0755, "/system/vendor/media");
set_perm(0, 2000, 0755, "/system/vendor/pittpatt");
set_perm(0, 2000, 0755, "/system/vendor/pittpatt/models");
set_perm(0, 2000, 0755, "/system/vendor/pittpatt/models/detection");
set_perm(0, 2000, 0755, "/system/vendor/pittpatt/models/detection/multi_pose_face_landmark_detectors.7");
set_perm(0, 2000, 0755, "/system/vendor/pittpatt/models/detection/yaw_roll_face_detectors.6");
set_perm_recursive(0, 2000, 0755, 0644, "/system/vendor/pittpatt/models/recognition");
set_perm(0, 0, 0644, "/system/vendor/pittpatt/models/recognition/face.face.y0-y0-22-b-N.bin");
set_perm_recursive(0, 2000, 0755, 0644, "/system/vendor/res");
set_perm(0, 0, 0644, "/system/vendor/res/images/dock/dock.png");
set_perm_recursive(0, 2000, 0755, 0755, "/system/xbin");
ui_print("Fixing fs_size in crypto footer...");
assert(samsung.fs_size_fix());
ui_print("Patching remaining system files...");
apply_patch("/system/build.prop", "-",
c8330f59436ae2482b603522287e4e969741ec12, 2634,
90670a6ad72244b367249db5065c563aeaefc8f3, package_extract_file("patch/system/build.prop.p"));
set_perm(0, 0, 0644, "/system/build.prop");
unmount("/system");

And the tail of the recovery log

Unpacking new recovery...
minzip: Can't create target file "/system/etc/install-recovery.sh": Permission denied
minzip: Extracted 0 file(s)
Symlinks and permissions...
set_perm: chown of /system/etc/install-recovery.sh to 0 0 failed: Operation not permitted
set_perm: chmod of /system/etc/install-recovery.sh to 544 failed: Operation not permitted
script aborted: set_perm: some changes failed
set_perm: some changes failed
E:Error executing updater binary in zip '/cache//8069c140a030f5fe6a6296743aab8c5a93971b79.signed-takju-JWR66Y-from-JWR66V.8069c140.zip'
E:Error installing zip file '/cache//8069c140a030f5fe6a6296743aab8c5a93971b79.signed-takju-JWR66Y-from-JWR66V.8069c140.zip'
Done processing script file

With the immutable bit set on the file no one can change (owner/perms) until the immutable bit is unset by a root (su) user.

So, if you use SuperSU you should do as hgmichna posted and chattr -i the install-recovery.sh file before proceeding with the OTA update.

I don't believe Koush's Superuser sets the immutable bit so you should be OK if that's what you use.

At any rate you'll probably need to flash Superuser again before booting to system.

HTH,

-JR-