Internal Storage: People freaked out yesterday when they went into check out the storage of their device and realized that internally, it only showed as 8GB. ”But what the hell! They told us 16GB!” Well, it does have 16GB, it’s just been partitioned off so that you can’t have access to it all. Part of it has been given to the OS and the other part to to “Application storage.” If you add up the 4GB or so of app storage along with the internal you get to 12GB, which means that the OS (Blur) is taking up another 4GB.
Unfortunately Moto doesn't do itself any favors by advertising the total space instead of the usable application and storage space. The majority of their customers are near the top of the bell curve.