I'm not really techie enough to explain how the new storage system works. However, there is a difference in how the SD card is used vs. the On Board storage. I'm now using a DroidX. Apps, games and data can all be on the SD card with the DroidX. As I understand it, apps and their data will have to be on the internal on board memory. The ext-memory SD card is only useful for movies, music, and pictures, no apps. When I read that it caused me to order the larger 32gb internal memory version. Ordering the 16gb and then installing a large ext-memory card will not give the same storage options. I don't have the problem but some were complaining about the size of some very large game applications quickly filling the 16gb storage.