Search a bit, there are lots of posts about it Several things you can do, none as simplke as a clear cache button (we can dream, no pun intended).
Hard reset your phone and reinstall your apps. if you don't have any data (other than contacts, calendar and gmail), this is quite simple due to your downloads being saved in the market.
What I do...don't worry about...if it becomes an issue and you get low on memory, the market cache will clear itself. So if I get a low memory alert, i install a couple of huge apps, market cache shrinks and I uninstall the apps.
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