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Internal fragmentation occurs when more storage is allocated than is actually requested. This left over space, known as slack space, causes a degradation of system performance. For example, space can be left over between the last byte of the file and the first byte of the next sector. This slack space can add up and eventually cause system performance to degrade. External fragmentation occurs when free memory becomes divided into several small blocks over time. For example, this can cause problems when an application requests a block of memory of 1000bytes, but the largest contiguous block of memory is only 300bytes. Even if ten blocks of 300 bytes are found, the allocation request will fail because they are not contiguous. This can be caused by an excessive amount of clutter on a system. Sources:

http://en.wikipedia.org/wiki/Fragmentation_(computer)

http://www.memorymanagement.org/glossary/e.html#external.fragmentation

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Q: Difference between internal and external fragmentation?
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