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Help "Insufficient Storage Available", Google Play

That is the space still available for data, mp3s, photos, etc. not what's available for applications. Apps go in a separate partition. You need to clear some app space.

Clear caches and uninstall apps you don't need and try again.
 
If you performed the ICS update, there was a glitch that it didn't remove some temporarily cached application files from Gingerbread.

Check Settings | Applications | Manage Applications, and note the "used" space. Then install the Amaze Memory Clear utility from HTCdev on the Play store. Run it once. Then check the application used space again. Should be a lower figure.
 
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