Question

After android installs an application from the Marketplace, does it keep the .apk file?

Is there a standard location where Android would keep such files?

Answer 1

Preinstalled applications are in /system/app folder. User installed applications are in /data/app. I guess you can’t access unless you have a rooted phone.
I don’t have a rooted phone here but try this code out:

public class Testing extends Activity {
    private static final String TAG = "TEST";
    @Override
    public void onCreate(Bundle savedInstanceState) {
        super.onCreate(savedInstanceState);
        setContentView(R.layout.main);
        File appsDir = new File("/data/app");

        String[] files = appsDir.list();

        for (int i = 0 ; i < files.length ; i++ ) {
            Log.d(TAG, "File: "+files[i]);

        }
    }

It does lists the apks in my rooted htc magic and in the emu.