Do SoftReference and WeakReference really only help when created as instance variables? Is there any benefit to using them in method scope?
Not sure what is the question here but:
1) soft ref try to keep the reference until jvm really really needs the memory. Great for caches, esp LRU ones. Look at many examples in Guava.
2) weak ref don't try to prevent gc to free the object at all. They are used if you want to know if that object is still used somewhere. For example they are used to store info about threads and classes, so that when the thread or the class is not used anymore we can discard the metainfo related to that.
3) phantom ref are like weak but without letting you reference the actual object. In this way you can be sure that passing the phantom around cannot resume the actual object (this is a risk with weak ref). Also phantom ref are blocking the object to be collected until you clear the ref.
ReferenceQueue: you don't enque stuff in there. gc will do for you. They allows you to know when some references get released, without having to check them one by one.