Note that I'm aware of these posts:
I don't want to send the app to anybody for testing (not knowing their UUID).
My situation is this
What I'd like to know: why I can't install this .ipa file to the device which UUID is presented in the provisioning profile.
If I try to install it using iTunes it starts to install, but after the progress bar (progress circle to be exact :P) on my device completes, the app icon just disappears and iTunes is stuck in the syncing process. No error message is shown.
I also tried to install it using diawi and got the error message "Unable to Download App". Although it shows me that my device's UUID is in the app's provisioning profile.
No, I believe the free account only allows you to build and install directly on the device with a development build. Also, those builds' provisioning profile expires after 7 days, so the OTA builds wouldn't last very long anyway.
If you want more details of why the install is failing, you should look at the device console during the installation. It will give you more details on the exact reason for the failure.