If you haven't already, try increasing the heap by using the java command option -Xmxnm, where n is the heap in MB. Assuming you are using Win 32 XP, you'll find that your maximum value will be somewhere between 1200MB and 1700MB (approx.) This is a limitation of Windows, not much can be done to change it.
You can use this command with varying values of MB to find your maximum:
java -Xmx1330m -version