I hope they took into account that the /cache partition is quite small (45.2MB on Galaxy S running CyanogenMod). For me it's not even possible to install applications that are bigger than a few megabytes. For example, I can't install World of Goo directly from the market app.
Edit: I probably should explain. Market seems to download apps to /cache partition before installing them.
Edit: I probably should explain. Market seems to download apps to /cache partition before installing them.