Android - What does the 'Failed to move application. Not enough memory' error mean when choosing 'Move to SD card'?

This is a known problem with leaked 2.2 Galaxy S Vibrant software (happened to me). Even if you're not using a Vibrant I would suspect the issue is the same, since the software is mostly the same.

You can fix it using this post at XDA if you have a Vibrant or i9000. If you have another model just check the subforum for your device (or take a risk and try this anyways).