There should be a setting in Applications somewhere to set the default install directory to SDCard and in Manage Apps, in each individual application, there is an option to Move to SDCard.
It's been so long since I used OTA though, no idea if it's even possible on the stock Froyo OTA.
Well pics that you take with your phone are already stored on your SD card in dcim and only apps with that option can be moved to the SD card Its in settings/applications/manage applications and you have to check each one