IMPORTANT: The Storage Location setting
Older camera models let you choose where pictures are stored (internal memory or card). If you have a menu setting called Storage Location, make sure it is set to the desired location. If you want to review, delete, and add new pictures to internal memory, choose Internal Memory. If you want to review, delete, and add pictures to a card, choose Memory Card or Automatic.
Still getting the error?
If you insert a card and still get the "Internal memory full" error, it means the Storage Location setting is set to Internal Memory. Press the Menu button, then find the Storage Location choice. (It may be under the Setup menu.) Change the Storage Location setting to Memory Card or Automatic.