I have the same issue - I bought the 8S as I wanted to test WinPhone8 and not to end up dissatisfied after spending much on a Lumia 920 or so. First of all, I`m happy I did this because my personal belief is that Windows Phone 8 was released before finished, my phone switches off often due to some problem...
Anyways, its the same thing - the 8S comes with 4GB of internal memory and the Windows itself takes about 70% of it and keeps eating space due to some reason. No idea who came up with this great thought to make a phone with slightly more memory then the OS itself needs and where you cannot install apps on your SD card...Brillian work and the first and last HTC I am having. Also, I do not understand why are they allowed to advertise the phone as having 4GB of internal storage when you can only get it with WP8 where it comes with less than a gig of actual storage space, I`m sure someone could win a lawsuit for consumer misleading.