Welcome. I'm sorry nobody has posted a response yet.
You will have to do some cleaning. The memory is used up by apps, their data, and files that you've put on the phone. Uninstall apps and delete files that you don't need.
The next thing to do is to move all your files to SD. I like to use a file manager program. My favorite is ES File Explorer:
https://play.google.com/store/apps/details?id=com.estrongs.android.pop
You can also try moving apps to SD. The usual functionality for doing this is only partially effective but it's easy and it can help. You can Settings -> Applications -> Manage Applications, go into each app, and choose to move it to SD (if the app supports that), or you can use a program to move many/all at once like this:
https://play.google.com/store/apps/details?id=com.a0soft.gphone.app2sd
You can also clear data for apps. Settings -> Applications -> Manage Applications, go into each app, and choose to clear data.
If you've done all that and still can't free up enough space, the next step is probably rooting, setting up an EXT partition on your SD card, and either using link2sd or mounting /data on it. This stuff is pretty technically intense, but if you want to learn the gory technical details of how Android works you might get in nice and deep here.