I would not pack media in the application itself. It would be better to put the media files on the server and load the application into the media files on the SD card. This is a common thing for Android apps. If you install such a large application, it means that you have much less space to install other applications. If you have users other than yourself, they will despise that the application is so large.
Another option is to install Froyo on the Nexus One and change the application so that it can be installed on the SD card .
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