[2012-04-14 17:09:26 - market] Failed to install.apk on device 'emulator-5554': timeout
[2012-04-14 17:09:26 - market] Launch canceled!
Try changing the ADB connection timeout. I think it defaults that to 5000ms and I changed mine to 10000ms to get rid of that problem. If you are in Eclipse, you can do this by going through Window -> Preferences and then it is in DDMS under Android.