I just had a quick look at my stats and about 80 per cent of my search traffic is now coming in for variations of “Lion” and “A newer version of this app is already installed on this computer”. Presumably, people who’ve used beta versions of OS X Lion are now having installation problems. I had a similar experience with Reeder.

If you have the error, unmount any disks—including back-up volumes and internal partitions—that may have a copy of Lion installed. You should then be able to install the latest version. If not, hold Option (Alt) while clicking the ‘Buy app’ button and the download will begin.

Should you have this problem with another app, you may also need to trash the beta version of the app from /Applications.