Labviev uses automonous memory allocation in which your functions, etc. that create data will automatically allocate the storage needs for that data. As the data is no longer being used, LV frees-up the associated memory. When you add new data to arrays, strings, etc., LV will adjust the memory needs as needed. How nice it is to not have to consider all the memory factors!
You can check much of the memory usage by going to Project>Show Profile Window>then setting the Enable Memory Profiling and Memory usage check boxes. Upon running your VI, then reviewing the Profile info, you can see the memory usage. Hope this fits...