Some time ago I was using the app GPS Status (which has a compass) and it was 90 degress off! I was out in the open, yet North was East. I did the usual battery pull and power off, but nothing seemed to correct it.
I took it to a Verizon store and they said the reason was that I had over 100 applications running at the same time. I suspect that they were looking at the app drawer. They did a factory resent which solved the problem. I'm sure the reset removed an app that wasn't playing nicely with the other apps.
Its not the number of apps per se, it's the available internal memory. I called Verizon once, because the phone was so sluggish I couldn't do anything. The Rep had me check my memory when I told him I only had 30MB available he freaked. I started uninstalling things and we had to do a factory reset to give the phone an attitude adjustment. He stated, not to go below 50MB and for optimal performance to keep at least 100MB available. That I'd when o became a cache and apps2sd zealot. Finally, I had to root my Droid, because there's a lot of apps that will not let you move to the SD card unless you're rooted. I figure if I don't use the widget I should be able to move it. However, developers will not make an app moveable if it has a widget, because a lot of yahoos rate it down in the market, because they don't understand you can't use the widget if u moved the app2sd. The majority of bad reviews I read in the market are do to user error. Sorry, for the long rant!
Yep, internal memory can play a role but it's definitely a direct effect of the apps on a singular basis. You will indeed, if you haven't already, download an app that will bog your whole system. You need to download apps 1 at a time so it's easy to pinpoint what is causing your system to hesitate. I learned that the hard way.
As far as internal memory is concerned, mine has been great ever since I rooted. Definitely the best thing I've done to gain performance once you combine with a slick ROM like Rubix or Liberty.