I have a 2 GB installed on the internal slot. I tried to move files within the memory but get the message "operation failed" everytime. I have the write protect lock in unlock position. I can write file onto this memory when connect to the PC though. Help me please. Also, if you can point me into the right direction on how to install software to this internal memory instead of to the ROM.

I assume you have a N800 and are using a SD card.

I am not sure as to regards to the first problem, but you should try reformatting the card a couple different ways. Try in a camera, in a USB reader, etc. There is a program from Panasonic specifically made for reformatting SD cards.

As to the second issue, you can't install programs directly to a removeable memory card unless you reformat it with ext2 and then mount it. The card is likely formatted with a FAT filesystem which is unable to work with Linux style file permissions.

Yes, I am using it with the N800. The card seems to work fine in my card reader. I have tried to reformat it a few times with PC, then N800, still refuses to work in the N800.
How do I format it with ext2 and mount it? I am learning some Linux stuff but still brand new to it.

Just in case you want to use the Panasonic SD formatting utility, click here