This is one solution which worked for me. I did not come across this solution anywhere online. I think I figured this out as I was having this issue and it was annoying.
For me this issue happens after I download an app from market which corrupts my market app or screws up my sd card.
Solution -
Switch-off the phone, and remove the SD card.
(P.S Side note: Market downloads and installs from market work fine without sd card. )
After the SD card is removed I was able to uninstall the rogue app(Most probably the last installed app before the issue started). Then switch off the phone and reinstall the sd card and when the phone is powered again everything is back to normal. But this issue seems to recur frequently. I have Sprint EVO 4g.
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