The memory is refering to is actually a small amount reserved for system functions like Bluetooth and loading other programs that need start at boot. So it's not an issue with having more space on the iPAQ. Generally a soft reset should clear up the problem, but if it doesn't, you might need to remove any recent programs that load at boot time because they may be starving the Bluetooth driver for memory.
Bluetooth, like all wireless communications technologies, uses a radio for communication, and that's why you're seeing the reference to "Bluetooth radio".
-------------------- Lisa Gade Editor in Chief, MobileTechReview