Steve,
You may have already found the answer. If not here is a little help.
-vmargs -Xmx256M For large-scale development you should modify your VM arguments to make more heap available. This example allows the Java heap to grow to 256 MB. This may not be enough for large projects. THe above is from ibm developers guide redbook.
Another tip from my personal experience, minimising WSAD 5.x window also releases any unused memory by the tool. I have verified this from the CPU utilization/memory usages.
hope this helps...
San