Spaceman's recommendation certainly seems worth a try. I can't think of anything else that might interfere with routine app installations, other than some communication problem with the SD card.
One other thing to try is clearing out the X's browser memory cache (Market operates through the browser) ...
Open browser > menu > more > settings > Clear Cache
And, if this doesn't work, try clearing history, cookie and form data in the same menu. You would have to re-enter passwords, but it might be worth it.