Apologies for not posting for awhile, I've just been getting on with using my phone, enjoying the HTC Desire Android experience.
There was however a fly in the ointment - the continuing out of memory error problems. Every other day my HTC Desire would inform me that it was running short of internal memory, and I should manage my applications.
This drove me crazy. I couldn't understand why my phone kept using up its memory when I wasn't adding any more apps or data.
The answer, I think, turns out to be Facebook bloating out my contacts file, I guess with status updates from all my friends. The contacts file was just getting bigger and bigger, pushing out other apps that I didn't really want to get rid of.
To solve the problem I went to the accounts section in the options on my phone, and turned off synching with Facebook. I then went to the manage application settings and cleared the data from my Contacts file. ONLY DO THIS IF YOU SAVE ALL YOUR CONTACTS VIA GOOGLEMAIL, THIS STEP WILL DELETE ALL YOUR CONTACTS DATA PERMANENTLY. Then when I fired up the people app again, my phone downloaded my contacts details from gmail, without adding all the Facebook bloat.
Since I've done this my phone has been running great. I've had no more memory problems and my HTC Desire is running fine.
Have a go at this solution if you're running into Android memory issues, but be very careful that you don't lose any of your contact details.