You can hack the firmware around a bit to get it to record video. You can also clear out some of the crap you don't need (pre-installed pics & tones) to free up a bit more space.
But, best case scenario, you have 10mb TOTAL memory available IF you're willing to hack it about in the first place.
My wife wanted one for ages. Finally got one to replace her old Sharp GX30i. Two weeks in, she hates it ... wishes she'd kept the Sharp!
It's all style over function in her opinion.