We've just pushed Android Studio 2.0 Preview 8 to the canary channel, as well as a new version of the Gradle plugin: 2.0.0-alpha8. You'll want to update both; instant run in particular is only enabled when using the latest versions of both:
This preview contains a number of important fixes relative to preview 7. In particular, a number of users have reported either really slow build times or failed builds using version 2.x of the Gradle plugin. The likely culprit for this is that in 2.x we've switched to perform dexing inside the build process, instead of running dex in an external process (because this not only makes incremental builds much faster, but also significantly speeds up full builds). However, the dex process had a larger default heap size than the Gradle daemon, which means that unless you've configured Gradle to run with more memory, the builds can be much more memory constrained which can severely slow down builds (or even make them fail running out of memory).
In 2.0.0-alpha8 we've added some automatic diagnostics for this: if the build process is too small, we switch back to out-of-memory dexing and emit a build warning explaining how to bump up the Gradle daemon size. (We're also working on some additional related improvements for the next build after alpha8.)
Preview 8 also continues to fix user reported bugs for Instant Run. Among a number of stability fixes, we've also turned off "cold swap" when running on a pre-Lollipop device; incompatible changes will trigger a normal/full build. "Hot swap" still works on all API levels >= 15.
Thanks to everyone for their patience helping us track down these problems!
You can update your current 2.0 Preview installation to Preview 8 via the built-in patch mechanism (Check for Updates).
You can also update from 1.5 to 2.0 Preview via the patch mechanism, but you may not want to do that: See our page about how to keep multiple installations simultaneously while Studio is in preview mode.
You can also download a full zip of 2.0 Preview from the Android Studio 2.0 Preview 8 page.
If you run into problems, be sure to check the Known Issues page which we'll update as necessary.
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