Solution: INSTALL_FAILED_INSUFFICIENT_STORAGE error in Android or Android Studio

 Eclipse will sometimes say this:
[2010-11-20 11:41:57 - My Cool Ass Application] Installation error: INSTALL_FAILED_INSUFFICIENT_STORAGE 
[2010-11-20 11:41:57 - My Cool Ass Application] Please check logcat output for more details. 
[2010-11-20 11:41:57 - My Cool Ass Application] Launch canceled!

This is cute and utterly annoying. In fact, this has caused me to completely give up on coding boated Android/Java for the day on a few occasions. waiting for the AVD to reboot – sucks. 

This Google Groups post says to restart the emulator. Yeah, thanks Google. At first I gave the emulator the benefit of the doubt and thought, “hey, my app has an mp3 compiled into it making it rather big (12MB), maybe I should move the mp3 to the SD Card upon installation or put the mp3 somewhere online and stream it to the system. 

 Then I clicked on     Settings->Applications->Manage Applications and the Android AVD said this:

You do not have any third party applications installed.

After hours of research, I figured out that this error means nothing at all. If you reattempt to upload your project (CTRL+F11) it will not solve the non-existent error. This means that you need to either restart the AVD (Android virtual machine you are testing the project on), or sometimes it gets so bad you need to restart the emulator too. If you still get it, you need to delete the AVD and create a new instance:

  Window->Android SDK AVD Manager->Delete->New...

Sometimes the Error console will say that it just brought the old version to the front screen! This is AFTER you tell the IDE to upload and install a new version. How disrespectful! Speed is another thing to consider. I use CTRL+F11 to hurry up and upload the app to the device and run it. If you edit your XML file to say wrap the contents of the LinearLayout tag in ScrollView tags, this causes Eclipse to slow down to a crawl. Not only that, the project will be loaded into the emulator AVD and you will see a nasty red X next time you go back to the XML to view it and not know why it’s there. – Take your time with this gigantic Cthulhuian slow IDE.

Or 

You need to increase the Android emulator's memory capacity, there are 2 ways for that: 1- Right click the root of your Android Project, go to "Run As" then go to "Run Configurations..." locate the "Android Application" node in the tree at the left, then select your project and go to the "Target" tab on the right side of the window look down for the "Additional Emulator Command Line Options" field (sometimes you'll need to make the window larger) and finally paste "-partition-size 1024" there. Click Apply and then Run to use your emulator. 2- Go to Eclipse's Preferences, then Select “Launch” Add “-partition-size 1024” on the “Default emulator option” field, then click “Apply” and use your emulator as usual.

  Want to see more details about this problem click these links 

 1.http://stackoverflow.com/questions/6788996/installation-error-install-failed-insufficient-storage-during-runing-emulator  

2.http://stackoverflow.com/questions/4709137/solution-android-install-failed-insufficient-storage-error

3. http://stackoverflow.com/questions/5359766/i-have-enough-memory-but-am-getting-the-install-failed-insufficient-storage-erro 

4. http://stackoverflow.com/questions/2239330/how-to-increase-storage-for-android-emulator-install-failed-insufficient-stora 

5. http://groups.google.com/group/android-developers/browse_thread/thread/920db96745cff96f?pli=1   

Sources;- http://google-androidlovers.blogspot.com/