You can, with some trickery, the simplest way is probably to clone the operating system to an SD card and boot from there. Search the forum, there's at least one or two threads currently active on that. (Out of the box executables wont' execute if installed on a card, the reason being that cards are mounted with the exe bit turned off.)

However, you won't run out of space on that internal flash unless you do something pretty dramatic (at least not by just installing applications. More probably by installing lots of music, pictures and other data, all of which can easily be put on an SD card without problems, unlike executable applications).
One reason the internal flash will hold out quite long is that it's using a compressed filesystem, so it'll take much more than it looks like.