Windows Phone 8 seems to have a major problem with eating up the built in storage for no apparent reason. On the low end devices with only 8gb of storage or even worse, only 4Gb, this "other" storage area's tendency to fill all of your usable space for 3rd party apps can be a real problem. I had to delete so many apps when it came time to install the Portico update because there was not enough space available to download it on the Nokia Lumia 810. There is an app called "Shrink Storage" which can help automatically reduce the amount of space used by the "Other Storage" category. Basically it fills up the entire phone with blank data so that the phone will think it's full. You reboot and Windows Phone should automatically delete some of its temporary files in that "Other" storage category. Then you run the app again and delete all of its fake data to free that up again. Repeating the process sometimes yields even more free space. That should work for a lot of things, but it doesn't seem to work on the "SkyDrive camera roll" folder.
A MicroSD Card Doesn't Help
It turns out that, even though I have my photos, videos, and music set to save to the 32gb MicroSD card, I also have my photos and videos set to auto-upload to SkyDrive at full resolution over WiFi. Now, that's great for a backup, but (as Nirmal of WPXbox discovered) what happens is that when Windows Phone uploads those photos and videos, it also copies them into the "Other" storage area in the main memory in order to display them (and sync them) in the "Skydrive camera roll" folder. As long as Windows Phone 8 sees those items in that folder on SkyDrive, it seems like it's going to keep the cache on the device so that you have local access to those items. In other words, with the SkyDrive auto-upload turned on, you're always going to have two copies of every photo and video that you take.
Reduce Your SkyDrive Cache
Removing that cache is not too much of a problem. You can go to SkyDrive.com from your desktop web browser, or any SkyDrive app (the one for Windows Phone will work fine), log-in with your Microsoft ID, and then select everything in the "SkyDrive camera roll" folder. Move all of those images and videos to any other folder on SkyDrive, or if you've downloaded them to your PC, you can delete them. If you're on SkyDrive in a desktop web browser, there's a nice "Download Folder" command under "Folder Actions" that will let you save the whole thing to your PC as a ZIP file. After they've been moved, go back to the Photos hub > Albums on your Windows Phone and look at the "Camera roll from SkyDrive" folder... it should sync and update as an empty folder. After that, depending on how many photos and videos you had in there, you'll notice a huge amount of free storage become available. You can repeat this for other image folders that auto-sync with SkyDrive such as the "Saved pictures" folder.
If you want to lessen the likellyhood of your free space getting eaten by the photos and videos that you take with your camera, you can shut off auto-upload for SkyDrive in Settings > Applications > Photos+Camera area, or you can simply remember to periodically clear out that "SkyDrive camera roll" folder using the SkyDrive app.
There are a number of other things that could be hogging up your "Other" storage area as well. Things like email attachments, Facebook photo album caches, and the Internet Explorer cache. For me, those don't take up a whole lot of space, but if you're looking for more tips about clearing out other temporary storage, check out WPXBox's article.
Did the Portico Installer Decide to Stick Around?
The SkyDrive camera roll folder trick worked for me, but I have another friend with an 8Gb Nokia Lumia 820 that has over 5Gb of Other Storage. She has a handful of very small apps, no offline map data, no web browser cache, no email attachments, and barely a few Mb of photos on the phone and in SkyDrive. What I suspect is taking up so much space on her phone is the "Over the Air" Portico operating system update, which probably did not delete its installation files or backed-up data from the phone after it successfully updated the operating system. So it would seem if you've installed the Portico update after buying your Windows Phone 8, you probably need to do a hard reset to clear out the old cache. That's not cool, I know.
What's Microsoft Doing About It?
We are hearing that an update to Windows Phone 8 is in the works that will give you better options for managing this "Other" storage area including a clear cache button that will allow you to manually free up space periodically. In the meantime, the above tips might help, and be sure to check out the thread on Microsoft Answers if want to voice your opinion about this problem. Personally, I think another system update to fix this is going to take way too long. Microsoft should have released a clean-up tool in the Windows Phone Store weeks ago to address this.
Have you run into the "Expanding Other Storage" problem and did any of these tips help fix it for you? Did your phone start getting very full after the recent Portico OS update?