Android: Insufficient Space When Downloading

Issue
When attempting to download a large application (30 mb or more), you receive the message "There is insufficient space on the device". In addition, you may receive prompts about insufficient space

Fix
Uninstall all Marketplace app updates. Below is an overview but the exact process may vary based upon Android version:

Settings > Applications > Manage Applications > Marketplace > Uninstall updates

The issue appears to be related to updates to the Marketplace application and the 30 mb storage partition often used on Android phones.

Fix courtesy of the Android forums.