I've compiled Trebuchet launcher from CyanogenMod 9, and trying to install it with adb:
$ adb install out/target/product/generic/system/app/Trebuchet.apk
3986 KB/s (7870141 bytes in 1.928s)
pkg: /data/local/tmp/Trebuchet.apk
Failure [INSTALL_FAILED_UPDATE_INCOMPATIBLE]
I tried on Nexus S with CM9 and Galaxy Nexus with stock JB. Why I'm getting this error?
EDIT: In my case I've tried to reinstall system package with package manager. That's not supported, so I've got this error. Source of the error may differ in your case.
it means the application which you want to install is already installed. just remove the old one and try again.