Are you installing Greasemonkey from the Add-ons site?

https://addons.mozilla.org/en-US/firefox/addon/greasemonkey/

Or through the Add-ons dialog (Tools > Add-ons > Get Add-ons) ?

Normally an extension will be recognized by Firefox and it either will ask you to confirm the installation or ask you to approve the host site to install software.

If you are downloading a Greasemonkey userscript, you will just see script text if Greasemonkey is disabled. It's easy to accidentally disable by clicking the "monkey" button, and just as easy to re-enable.

You can install extension by clicking the Add to Firefox button or if you have saved the XPI file to your computer via File > Open File.

See also:

• http://kb.mozillazine.org/Installing_extensions