In the log, when you see something such as:
DEBUG/dalvikvm(####): GC freed 5052 objects / 577400 bytes in 54ms
Does it mean that it freed 5052 objects that my application itself created or could some of those 5052 objects be ones that other applications running in the background created?
The number in parens is the process number that the garbage collector is running for. You can either do a ps from the shell or check DDMS to find out the process number for your application. Filter by the process number to see on the garbage collection happening for the VM instance running your app.