So after some playing I finally have found the difference between all three. System Memory: Apps (By Defaults Location) Apps Cache that are installed on the phone, and of course apps already saved onto the phone and there Cache Phone Memory (Which is the phones internal memory card): When you install apps to the SD card this is the SD card they are talking about. The apps by default do not install to the actual external memory card you place in the phone. I believe you need the app "Apps2sd" to move them to the external. This is also where pictures and videos are installed at by default when taking pictures unless you manually change the option in the camera to save to the external SD. External Memory: Will be used for apps if the phone doesn't have a built in SD Card but in this case since the LG Thrill do's have a built in memory card by default this memory card is only used for photo and video storage if specified in the phones camera. By default apps will use the phones internal memory card for picture saving, this is also the case for apps that take pictures. If you phone is running and loading slower then usual then check your system memory to see how low it is and begin moving apps to the phone memory card. Not sure if phone memory has anything to do with performance but I pretty much cleaned up both locations to get my thrill running smooth again. From my understanding no Android smart phone currently has more then about 2gb of actual system memory dedicated to apps. When they state that the phone has 8gb or 16gb of memory that just means it has a internal sd card which sucks since not all apps can be saved to the SD. When the system memory is low the phone performs poorly. Hope this helps.