Help with LG Optimus Logic Memory
This is the issue with Android.

The 1GB internal storage is classed as an 'Internal SD Card'. A section of this (normally about a 10th) will be used to store /data.

/data is where the apps are installed too, and is mounted as a completely different area.

The rest of the 1GB internal storage is most likely mounted at /sdcard, and the external sdcard mounted at /sdcard_ext or something similar.

This is down to the history of Android devices, and can be quite annoying.

An example that shows this is correct is my SGS2. The app install area has 1GB of memory, and the rest of the 10GB internal is used as an internal SD card.

This is why when you select to move an app to the SD card, it moved it to the 1GB space.

If it grayed out, it is already on the SD card, or the developer does not want it installed on the SD card.