Just thought I'd share this with you.
I got this error message “Couldn’t install on USB storage or SD card”
The solution is to connect your device to your PC and manually delete the “smdl2temp1” file. The file is likely to reside in 2 locations:
1. /sdcard/.android_secure: this is an invisible folder on your SD card, which you can access with any file manager, like ASTRO
2. /mnt/secure/asec/: access to this folder requires root and a program like Root Explorer
smdl2temp1 is a temporary file. If something goes wrong with a download or installation, the file might get stuck in memory. Next time you try to install, it tries to create this file and fails because it already exists.
Edit by zuperman: If that didn't work there is a detailed option here:
www.androidpolice.com/2011/04/19/fixing-...-problem-on-android/