The Android system uses a lot of the memory I believe - did a factory reset 2 weeks ago and after the reset, before I added any apps, the phone had used nearly 70mb of 147mb. All my apps are back and internal memory fluctuates between about 120mb to 135mb depending on how much Cache data the apps are storing, and what apps I've downloaded/uninstalled. So, I guess on my phone my apps normally use about 60mb of internal storage, which suggests that the Android system is using the rest.