I had the same issue even though I cleared caches and had almost no apps. Did a reset, installed my programs again and now have 94mb free instead of 30
Yes. One reason is that various applications make use of the phone's memory. For example, when you browse the internet, the browser stores a lot of information in a "cache". Getting data from the cache at a later time is quicker than getting it from the internet.
Have a look at Settings | Applications | Manage Applications... Clear Cache
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