Most owners of Android devices are complaining about storage space issues after installing only a handful of applications. Since every Android release till 2.1 does not allow users to install their apps on the SD memory card, they are left with the little internal memory their device comes with.
Even though the situation is about to change once Android 2.2 hits the market, thanks to the Apps2SD support, there still is quite a large number of gadgets that will probably never be able to update to the latest version of the OS. For those unfamiliar with what Apps2SD means, this application moves your software to the SD card, freeing up more room on your phone.
This is not recommended if using less than a Class 4 SD card, as it may randomly eject and cause all sorts of issues, so try getting a class 6 card. For the moment, there's no official support for this, but you will be able to install it on most Android devices. Still, beware of the fact that by doing this, you will erase everything on your SD card, so make sure you back it up before you start.
Anyway, to avoid using the method above and free up some MB on the internal storage, you will need to clear the cache of some applications. Simply go to Settings / Applications / Manage applications, click on the Menu button and select the Sort by size option.
First of all, any app that's on top of the list and is not used too often can be uninstalled. Secondly, click on one of the applications to check if it has a cache or not. On the next window that will pop up, click on the Clear cache button, if you have the option available. Recommended places you might look for large cache might be Maps, Market, Internet and Photos applications.
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How to Free Up Storage Space on Android Devices
Common method recommended for non-techies