I need help with my ZTE Merit

As this phone has an internal memory of 512MB RAM & 512MB ROM. So, what ever applications will be downloaded on this phone will use some space from the Internal Memory. And, not all the applications can be moved to SD card. So, to solve this issue delete some of the unwanted applications.
 
What kebo11 told is good if you are a power user... if not abstain since if you screw it up your phone will be out of warranty.... in android gingerbread apps cant be installed to sd card, thats your phone's capability limitation so you ll have to live with it by managing your data smartly....