When we customize a product with in total around 8MB of pictures (can be 4 images of 2 MB) then we get a memory error in the log file. We have a server of 128 MB internal memory. We don't want to increase the memory because 8MB is not that much.
The memory does not only have to deal with those 8mb of images, at the same time it needs to deal with all programs/ plugins / etc. running on the server. It seems that is simply not enough, sorry.