How can I free up more space on my Android (2.2 Froyo) phone?
I have an HTC Desire, too, and I really had the same problem for a long while. 
Until I found this post:
http://www.getele.com/how-to/how-to-install-apps-to-your-sd-card-on-android-froyo.html

You do NOT have to root the phone, or something like that. It tells you to download the Android SDK to your computer, then connect it via USB and enter only one small one-line command. After that, ALL apps (except system apps) will be moveable to SD card, and also have SD card as default install location. 

Since then, I really get the most out of my phone, and have dozens more apps. At the moment about 130 apps. Some of them shrink from 23mb to 120kb, others are not so drastic, but it REALLY helps.

Hope I could help,
Heval