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So, this is getting completely blown out of proportion. People need to do more research. Here's just one little update; there's a lot more information about it out there.

http://www.downloadsquad.com/2009/11/09/droid-does-only-have-256mb-of-storage-for-apps/

Read the "Update" section. Only the core of the application has to be stored in the ROM. That is often times not very much at all, something in the range of 100-250kb. The largest part of the file size has to do with the graphics and whatnot and that can be stored on the sd card. This is by no means a perfect solution, but it still works. Google will likely do some tweaking in the future. I would personally like to see fixed memory in the Droid phones like the iPhone. I don't like flimsy sd cards personally.
 
While that might be true it brings up other concerns. You're on your alternate SD card that you loaded with music or videos and you want to use an app that has those resources on a different card. I guess you have to swap cards just to use that app, then you have to swap again just to listen to your music again? Want to eliminate that hassle by dropping a 32GB card in there, according to newegg its an extra $80 on top of the phone's price.

Its a bad and clunky solution and it negates any benefits the built in multitasking gives you. Can you even keep an app running if you swap the cards?
 
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