Android Developers Blog: Apps on SD Card: The Details is a post on Android Developers Blog by Suchi Amalapurapu, the creator of the App2SD feature, a new one in Android 2.2.
However, I reported an issue on the Android bug tracker where Android Market updates cannot be done if the application is deployed to the SD card. I had this problem with two separate apps deployed to the SD on my NexusOne: Secrets and Wifi Analyzer.
UPDATE (9/19/10): I discovered that deleting the file smdl2tmp1.asec (with the letter L before the 2) from the /mnt/secure/asec directory clears up this problem. I did this deletion with my phone mounted on my PC as the file is not visible with my Android file manager OI File Manager.
UPDATE (10/16/10) Soon after I made a post to android-dev that helped solve a problem that was posted there and advertising my Android bug tracker issue, an engineer from the Android project finally discovered my issue. The engineer said that the issue has been fixed on the 'internal tree' (see http://code.google.com/p/android/issues/detail?id=9593#c5). The engineer marked the issue's status as 'FutureRelease'. Your guess is as good as mine as to what future release he/she is talking about.
