Is your Phone connected via USB? if yes, the SDCard is not mounted. Try to connect your phone in another mode or copy your software apk onto the SDCard, disconnect it from the pc and run the installation. It should work then :-)
For example, my Motorola Defy supports the usb modes "mass storage mode" and "media server" mode. In mass storage mode, the sdcard is unmounted from the device, so you can access it from your pc.
The problem is the "preferExternal" command, which tells Eclipse to try the installation on SDCard.
You can also try to erase the installLocation command to install it your app in internal storage.
Greetings!
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