If you got that annoying market error 18 on updates or fresh installs it’s usually SD-Card related. I know of two simple solutions that solved all these cases for me:

Solution 1: Disabling the SD-Card before updates/installing

The easiest way to solve this is disabling the SD-Card by either removing it – or disabling it using the android preferences. If you still want to use APP2SD you can use Preferences -> Applications to move the files to SD card after you remounted it.

Solution 2: Removing the caching file on the SD-Card that usually causes the error 18

Step 1: Mount your Android phone by connecting it with USB to your PC
Step 2: Set your phone to work as a USB drive
Step 3: Mount/Open your phone’s drive in explorer/finder/whatever you use
Step 4: The root of the sd card should contain a folder named “.android.secure”, open it
Step 5: Delete “smdl2tmp1.asec”

After you deleted the file, you shouldn’t see the error 18 again.