How have I used storage on my iPhone?

Settings > General > Usage says: 2.8 GB Available, 3.6 GB Used, 1.8 GB Music, and 450 MB Photos & Camera. That's it. I want my 3.5 GB "Used" back!

The 3.6GB "used" is a total summation of every single app, music, video, picture file you have.

It's not its own category, it's a TOTAL.

Just like the 2.8GB Available.

The "Available" + "Used" = Total storage on your iPhone (I assume you have the 8GB version, since the 8GB has roughly 7.2-7.4GB of actual usable space).

Used is a combination of everything.

You never have total memory because operating systems take up some memory.