Erronous Low Data Space Error on Droid Incredible
This error is not just for the total storage, it is also for specific "mount points" like /data/data, for example, where the applications on the device store their data. If this mount point becomes low on space, because it is not given access to "all the storage", then you will receive that low space message. You can uninstall apps that you no longer need/use or go in to the Settings -> Applications -> Manage Applications and clear the data for apps that are using a lot, or you don't use often.