I had to deal with memory errors some days ago... check with how much memory you're server config is running. UncleCheese recommended to me 128MB, maybe you only have ~25MB in the config? Depending on what kind of server you are, there will be different ways to work around this issue. Look into this thread: http://www.silverstripe.org/dataobjectmanager-module-forum/show/273134?start=8
And this website should be very helpful: http://www.ducea.com/2008/02/14/increase-php-memory-limit/
The production site is on a shared host so I seem to remember the memory allocation being pretty small. I think I had to tweak the install script to force it to install since SS wants a minimum of 32MB of memory (or something like that).