If they were located on the SD card then the update would fail after it was downloaded.
After searching around for quite a bit, the following did the trick:
- Connect your phone to your PC
- When the connection is detected by the phone, it may ask you if you wish to switch to USB storage. Say yes.
- From your PC, go to the phone's drive (that should have just appeared in Explorer) and navigate to /sdcard/.android_secure/.
- Find the file called smdl2tmp1.asec and delete it
- Disconnect the phone
A number of people have commented that they can no longer find the file smdl2tmp1.asec.
I have been told by others (but have not tested myself, as I don't have the problem) that another option is to connect the phone to a PC and use Windows Explorer to look at the SD card and try to find that file.
I am afraid I don't have any other suggestions :-(
[Blatant plug! See my article about my album on Google Play.]
ps: Comments and/or links to this article are most welcome!