There are two kind of "internal" flash:
- A built-in 256MB flash storage. This one is integrated in the chipset and can't be replaced. This is where all your installed applications go, as well as your Documents directory etc. (/home/user/ in the filesystem).
- A slot for a memory card, under the battery cover. This one takes SD cards as well as the mini-SD card that came with the unit (in an adapter). Buy any SD or SDHC card, install it there.

Then there's also the external slot for another SD card. It's all marked on that little leaflet that came in the box.