The 256 MB system flash has a compressed filesystem, so it holds about 1 GB of installed software. Unfortunately, it is true that it is quite easy to fill up, in particular with games which can have non-compresible data (images, music, etc).

To overcome this limitation, you have basically 3 options, but you need some linux knowledge to understand what you are doing and not become stuck at the first minimal mistake.

First one is to do as auouymous said, manually move data after each install and link to it. Sometimes it is tricky because the fat filesystem in the SD cards doesn't have permissions, but you can overcome this limitation by repartitioning the SD card and making an ext2/3 partition where to move things.

A more brave and risky approach (here, because it is usual in the desktop/server linux world) would be to make the partition, move an entire filesystem branch there (/usr/share is a good candidate, or even all /usr), and directly mount (or link) the partition in the filesystem branch.

And the last and easyest way, clone to SD, which in addition has the advantages auouymous already explained, but take into account what I said about the compressed filesystem and make a linux partition of at least 1,5 GB.

When partitioning SD, for performance reasons of the underlying hardware, make the partition always start at a 4MB bondary.

So, Nokia took a really shortsighted approach when designing the filesystem, but thanks to the power of linux, it is trivial to fix it.

About the browser slowness, try opera and tear.
And install CSSU, Diablo Turbo, Telescope and Advanced SystemUI, you'll see quite an improvement.
And make sure your wifi is transmitting at 100 mW.