James,
Actually, you could still be running out of memory on a large project containing hundreds of JSPs because
of an interaction problem we found between the way that classloaders and the Java security mechanism
work. The issue gobbles up about 2MB per JSP compile so this could explain the OutOfMemory exception
even with the VM settings you have. We’ve worked around the problem internally and it will be part of
3.8.2. So, to be sure I’d turn off JSP compilation in your environment until we determine if there are
other issues. You can do this at Window > Preferences > MyEclipse > Validation.