As a matter of fact, it does NOT work. Well, I should say, that I can delete the one, pause the download, restart phone, all of that crap, and the icon still loads wrong.
Today, since I'm off, I deleted all offending apps. Synced to the computer. Checked the offending apps to reload. Apps loaded fine! Ejected iPhone, restarted iPhone as recommended after app downloading and guess what? All of the apps are messed up again.
I use 3 apps in particular called MyEyesOnly, BillMinder and AwesomeNotes which combined, took me HOURS to input info. I can see my only option left is a complete restore. That really irritates me. I've had all 3 iPhones at this point and never had a single solitary issue until last week. I got the 3GS on release day and it just started acting up last week? What happened? Why is it only some phones and not others?
I'm going to do a restore. If after that it doesn't fix it, I'm going to the Apple store and telling them where to shove their defective iPhone. If others have this issue, what's to say a new iPhone won't also?