How to install the application in SDcard (android phone)?
This can "officially" only be done if you are running android-2.2-froyo and you set the app to install on the sdcard. 

If you are not running android-2.2-froyo then the only way to do it is with some "hackery", which involves partitioning your sdcard, symbolic links and some other things. There are some custom ROMs that would have this built in

The non-froyo methods also involve having your phone rooted.