Possible current solution
Here's a few current tips of how to free up space and have a faster running iPhone.
-Follow the steps you've seen out there that advise running on at lease 500mb disk space. Turn off push services and enable fetch. Clear out that browser cache. You should see mild improvements.
-On a hacked phone, get your hands on the what are possibly the two greatest apps our there: backgrounder and kirikae. They work in tandem. Bger enables apps to run in the bg (much like native apps do by nature). It also allows you to turn off native apps running in the background.

Kirikae enables you to switch between apps. So... You might want to jump from say Evernote to facebook. There would be enough free space to do this with no problems granted Evernote and facebook are the only apps running. Sometimes you can work in a possible 3rd of 4th app running, but then It gets a bit tired and iPhone does what it will do by nature... quitting apps. But the mere ability to put native apps to sleep is an advance in itself.

Oh, and you ALWAYS know what app is running because you get a small badge on the corner of each app that's currently running. It's like a reminder saying, "hey, I'm using ram, if that's ok with you!" Double click your home button and a screen pops up. You now have a list of running apps displaying their icon and the option to close the running app with a tap of the screen on a little "x" just next to the icon. Sweet!
-Get your hands on an app in the app store called push gmail. It's super light and will notify you when you get a new message in your gmail account (granted, your a gmail user). This is great because you can turn off all push services in the phone, but only allow for this (light weight) app to deliver a push notification. Plus, you get notified in several different sound flavors. So you don't have to check your phone when you hear someone else's mail chime. Your chime will be custom. And, you then open your mail app so that it can then retrieve the mail you already know has arrived (you got to preview the message in the push notification pop-up).
-Now, mail and other services like safari like to run in the background. I've found that mail hardly ever wants to quit. This is because the settings in the app are geared to constantly check for new mail. Even when you close the app in backgrounder, it might want to fetch for mail an hour later and stay running once it secretly reopens. For this, there's and extra layer of protection that I stumbled across in cydia. There's an SBSetting toggle called "push mail" that will keep mail closed if you set the toggle to off. Now, when mail is closed it will stay closed.
-Finally, when all else fails, I found yet another method to free up some space. It's in SBSettings. It's called Processes. This should appear to be a toggle, but once you press the button, you are presented a small screen that resembles backgrounder's list of running apps. You may choose to close an app, or select one big button that says "free up memory." Once FUM is pressed, you can watch as the number of available MB jumps from some low number (like 10) to something smooth (like 45)... SBSettings has built within the interface a convenient view of several items such as free hard disk space, ram available and even your phones ip addresses for both wifi and data. (This is how you can watch as space is freed up). Sometimes mine reaches up to 53 MB available, and I'm flying again, all from my 2g phone. Fortunately, all iPhone models have access to these methods for freeing up ram.
Please let me know if this helps anyone. I've lived off these features for some time now, and the developers of kirakae and backgrounder have really worked in some powerful features that are very compact and lightweight and don't eat up the very ram you're trying to free up. Hats off to them for a great job. Now if you would excuse me, I've got some memory to free up!
(written in simplenote, cut and pasted into safari, running both simultaneously, switching between apps using backgrouner and kirikae).