I just got a notification that my phone is low on space, and am no longer able to receive sms messages. Is there anyway to set it so that everything is saved to the SD card instead of the Internal memory of the phone?
Most everything is saved by default to the SD card. That's why Motorola saw fit to include one. The internal memory is used by SMS, apps, and some other things. Sounds like you need to clean up your SMS/MMS inbox or get rid of some apps.
SMS messages it seems is stored in the SQLite Database, so it is not feasible (at this point) to move them to the SD Card. What I do with my messages (granted I am not a texting fiend like some people around this forum), is I use SMS Backup to store all my old texts to Gmail (where they are easily searchable later)and clear those threads off the phone. It keeps the old messages safe from corruption and allows me free space on my phone.