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You also need to boot into recovery and format your SD card with a larger ext partition size. Mine was 128 mb and could only get a few apps installed before getting bad installs and insufficient space warnings.
Now I have 512mb and my wife has 1gb of ext partition space and I have 50+ apps installed and 200mb left to install more apps.
The default save location for apps is on the ext partition. Titanium backup shows how much room is left on your ext partition. Mine got down to 10mb before I was getting errors.
Sent from my LG-VM670 using Android Central Forums