One of the strange issues with the original shipping version ofis that you can't effectively manage storage on the device, and a special kind of storage, previously known as "other storage," would grow over time, consuming the free space on the phone. Microsoft offered a fix for the "other storage" bug in GDR2, but with Update 3, we now see a much more complete storage management solution.
I discussed Microsoft's previous solution for the "other storage" bug in Windows Phone 8 + GDR2: Fix for "Other" Storage Bug, so check out that article for the details. Likewise, Nokia provided its own fix called Storage Check, though of course that solution is only available to Lumia users.
But in Update 3 (internally called GDR3), things have gotten even better: Now, Microsoft has dramatically improved the Phone Storage settings app, providing a complete solution for storage management that is available to all users, and in a single, obvious place.
To understand the changes, let's look at how the Phone Storage settings app worked before Update 3. In the initial screen, you can see how much storage is used on your device (and if available, on your expansion SD card too), and manage which storage device is used to store music and videos, and pictures.
If you tap on the Phone or SD graphic, you are brought to a second screen in which you can see how much space is used by different parts of Windows Phone (music and videos, pictures, apps, and so on). But this view isn't interactive: All you can do is see what's used and where.
With Update 3, that initial screen hasn't changed. But when you tap on the Phone or SD graphic, the secondary screen you see is now much more colorful. More important, it's also interactive.
You can tap each item on this screen in order to manage the content. In the case of items like Music + Videos, a Manage button simply provides a way to access the underlying experience—in this case, the Music + Videos hub—where you can manually manage the content. (You could delete music or videos to save space.)
But other items offer unique options.
The big one is temporary files: Here, you are given the option to manually delete temporary files, which are a big part of what used to be called "other storage," that part of storage that used to just grow and grow in Windows Phone.
And then there is the System item, which can't be managed because this is automatically managed by the OS.
Overall, this seemingly small—and, to be fair, largely hidden—change is a big deal, and when you combine it with the automatic "other" storage management from GDR2, you can see that storage management on Windows Phone 8 has come a long way in just a year. In fact, a year ago it was almost non-existent.