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From page 16 of the beta 3.0 SDK DeveloperGuide.pdf:
Applications are limited to a maximum of 2MB in size, due the the limited amount of flash storage available. In general, since these are internet enabled applications, they tend to be much smaller and are typically < 300KB in size. Most of the space is consumed by artwork and the code size is minimal. If you find that your application is too large to install, look at removing some of the artwork from your application package and placing it on the web where it is easier to modify and it can be downloaded dynamically at runtime.
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