Memory typically stands for RAM in 90% of the places it's used in regarding technology.
If you haven't done this already, try moving all of the apps you can to your SD Card (this WILL remove the ability to use widgets for those apps if applicable. i.e.: Google+ widget), or removing some apps you don't use or don't really need. Another reason why you may be low on internal memory is because Sense takes up a nice chunk (even if you're not using it, it's still there). That is if, and only if, you're not using an AOSP ROM like CyanogenMod.