256 MB limit on Geoprocessing??

My current issue with memory usage building up over 1000 model iterations at ArcGIS 10.0 seems to have come to a head. It seems that as the memory usage in ArcCatalog approaches 256 MB the ArcCatalog will hang up, if not crash. Is there some memory limit for geoprocessing that may be adjusted?

I'm running a Core i5 with 4 GB of RAM on Windows 7 Pro 64-bit, so don't consider the PC to be constrained in any particular way.