When you run Xcode for the first time you are prompted to remove the old version of Xcode that is in installed in /Developer (version 4.2.1 in my case) and also to delete the now redundant Xcode installer from /Applications: Once the download is complete you should find Xcode installed in your /Applications folder just like any other App Store application.

(Note that if you are developing for the iOS 5.1 beta release you should continue to use the Xcode 4.3 Developer preview available from the iOS Dev Center.) You no longer even get an installation dialog offering you a choice of the installation directory though I guess there is nothing to stop you from moving it later. Xcode 4.3 is a free download from the Mac App Store which, once it has downloaded, will install directly into the /Applications directory. Previously when you installed from the App Store you rather confusingly downloaded an Xcode installer into the Applications directory which you then ran to install Xcode into /Developer.

The big change is that Xcode is now a standard Mac App Store package which installs directly into the Applications directory. As if all the excitement of Mountain Lion was not enough for this week Apple has also pushed out Xcode 4.3.

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