That problem occurs when you are trying to install an update to a system file that was previously only updated via system updates and not available into the market. Google has been making more and more of these apps available in the market, and as such there is no need to have them in the /system/app folder anymore. I've run into the issue with Google Search, Voice Search, Street View, etc.
The solution is to go into /system/app and delete the CarHome.apk. Then reboot, and install Car Home in the market.
thank you, that response was incredibly fast and helpful. I love this place.
It appears it's a bit more complicated as in /system/app there is CarHomeGoogle.apk AND CarHomeLauncher.apk. I'm trying to work out which one to remove now.
EDIT: It just worked for me by removing CarHomeGoogle.apk, rebooting, and then installing Car Home via market. Thanks for the tip off that there was an updated version of that app.
yeah alot of people removed the Launcher as well dont do this!! you wont be able to get into the App!!! which is pretty nice I might add!!! adding Shortcuts FTW!!!!