Most of the today's Android have Three types of storages.
- Internal Storage
- Phone storage
- External storage.
Difference between Internal, Phone and External Storage.
In laymen term, it is the personal space of Android, where it stores your (system) applications and its data as well as other sensitive data.
In short this memory is reserved for your operating system and personal data.
And you cannot access it directly, even with a PC.
If you get a Low storage space you can move apps to SD-CARD to free up some space.
This storage gets erased to default by Factory Reset
This is the storage that is available to you. When you "move" Applications, this is where they get stored. It is shown as SD-CARD or similiar name. You can use like a normal memory storage.
It doesnot get erased by Factory Reset.
As name suggest, it is the external storage available to you ie your Memory Card.
For Note N7000 is 32/64. So it atleast supports 32 GB memory card.
To move apps to SD card. download Apps2SD APP. The App will give you full list of apps which you can transfer to SD card and will prompt you in notifications whenever you download an app which can be moved to Sd card.
Not all apps can be transferred to your SD card. (If developers check ‘Apps2SD’ option in there apps, only then you can move that App to SD card.) Another important thing to note is that complete app will not move to SD card. If you move 25 MB Adobe Flash Player to SD card, about 10 MB space will be freed on your internal storage.
How to get more?
In order to get even more that that 2GB (Its a lot already!), you need to do some Advanced Steps which requires basic knowledge of root and/or partition.
By simply rooting your phone, you get the freedom to use it as you want to, but that voids your warranty. you can move most apps and other data to SD card even without root, but even that is something basic users shouldnt have to be bothered with.
For Rooted Devices:
Partitioning Memory Card:
A great article is written over here which explains all the steps in a lucid way.
By following the above steps, you will get extra internal storage from your memory card.
Please note that the above method will Erase your memory card so dont forget to make a Backup in your PC.
Please note that, once done, if you remove your memory card, all the data and apps that you linked wont be available to you anymore. Hence use a memory card (I suggest 16 GB) that can suffice your storage needs.
This section is for advance users only as the knowledge require and risk is much higher. Continue on your own discretion.
Partitioning Internal Storage:
Rather than partitioning memory card and get stuck with it, why not partition Internal Storage itself!
Here is the link to the Guide which is Especially made for N7000
Swapping Internal and Phone storage.
This Article shows how you can even increase the internal storage. Combining with the above and get even more space!
It takes a lot of hard-work to write a good answer, a thumbs-up is always appreciated!