Karbon A9+ System space and Internal Storage

1. I have recently moved from iPhone 3G (3 years) to Karbon A9+ (ICS). While my mobile is showing GBs of space available, I frequently get a Low System space warning. I had then added an 8 GB external SD card but to no avail. Coming from an iPhone background, this was confusing.... if I have tonnes of space, why am I getting such notifications? 2. On System Setting under Storage, it displays "Total space 581 MB" out of which 89 MB is available. Internal Storage is 2.57 GB out of which 2.56 GB is available. While on other mobiles of other brands, I don't see the distinction between System space and Internal Storage. Why this discrepancy and what are the consequences? 3. I have rooted my device... Is there some method where I can increase my system space to include the Internal Storage which is lying almost completely un-utilized?