[R] R 2.9.2 memory max - object vector size

[S. Few]

Me:

Win XP
4 gig ram
R 2.9.2

library(foreign) # to read/write SPSS files
library(doBy) # for summaryBy
library(RODBC)
setwd("C:\\Documents and Settings\\............00909BR")
gc()
memory.limit(size=4000)

##  PROBLEM:

I have memory limit problems. R and otherwise. My dataframes for
merging or subsetting are about 300k to 900k records.
I've had errors such as vector size too large. gc() was done.....reset
workspace, etc.

This fails:

y$pickseq<-with(y,ave(as.numeric(as.Date(timestamp)),id,FUN=seq))

Any clues?

Is this 2.9.2?

Skipping forward, should I download version R 2.8 or less?

Thanks!
Steve