For future reference: if you're compiling a mobile app for Adobe AIR and you get this error, it basically means that there's something wrong with the certificate that you're compiling with. The app I'm working on at the moment is using TestFlight for distribution and after pushing a build, I was unable to install to any of my devices. The installation on both iPad and iPhone went as normal until after the install, where it just said that it "Failed to install".
Turns out I had mixed up release and development versions of the certificates. Duhh... Posting it here to help others doing the same and not finding a solution.
Feb 11 2013 update: so got this error again and my own explanation showed up in Google - but - it didn't help me. So some more detail on the problem I had today. I have several identities on some of my accounts. Some are for companies I work for and for some reason - I have two developer identities with Apple. Let's hope I don't pay for both
This time, I got the error for trying to export the app, or rather the provisioning file with a company certificate for wich i didn't have the Key (.p12/.cer). As soon as I connected the right certificate to the provisioning file, I was able to install the app on my phone. What made me solve it eventually was to open the Organizer app in XCode. This will actually tell you if the Provisioning profile is valid, whereas Flash Builder will not. It was a bit of a facepalm when i realized it, but I'm posting it here so it can help others.
Here's Organizer showing me what Flash builder should have told me half a day ago...
Update May 2014: another way to get this error -> if you're toggling between release and development versions of the app, you must be sure that the "aps-environment" are set to "development" and not "production" when testing.04 December 2012 at 3:33 pm