It's called partitioning. It's believed to be mostly in preparation for ICS, the new OS coming out soon. The Bionic has partitioned, or separated, the storage into segments. 4gbs are reserved specifically for apps, nothing can go in or out. So at this point it's essentially pointless to store apps on the SD card, since it'll be more reliable in the partition. The other 4gb is reserved I believe for system processes and whatnot, so it's also untouchable. The last 8gb is the open memory that can be used for whatever. Then you also have the 16gb SD card, listed as SD-ext in your file manager. Hope this clears things up. It may seem pointless, but if you really think about it it makes perfect sense. 4GB for apps is more than you'll ever need, if you do fill it all up please post on here so you can be given a medal...