This is an ambigious statement! What exactly do you mean?
Are we talking about the RAM or the Storage? Memory is supposed to mean the RAM in the device, which is lesser than the FP1 devices, but with the improvements in memory management, the difference is not really noticible.
If you are talking about storage, then yes, for some stupid reason, you only get a meagre 30 - 40 MB free on the phone drive. But you are also provided with a 8GB MiniSD card which makes up for the storage.
Tip - All N85 users, uninstall ThemeDIY to free up around 6MB space from your phone drive. I had no use for the software, it was a worthless use of space for me.