Are you sure it’s a memory problem? I had that, rehosted with a more generous service, and hit the next issue, which looked pretty similar. This time the error came from the php script execution time limit, which was way too small to handle the generation of all the thumbnails that ecommerce wants. I blew past this by hacking the code – never a good idea but like you, I was stuck. I set up an option that did everything the standard importer did when importing a product with images, with the images referenced in CSV columns, but without actually generating the thumbnails. Instead, it generates a file with a list of the thumbnails needed. I then use that file with a little php code and ImageMagik to generate the thumbnails on my own computers and upload them.
If you can import a small number of products – say 20 or so, then it’s execution time and not memory that’s blocking you.
It’s a little messy and not my proudest moment, but like you I was (and still am) stuck. I can readily import batches of over 1000 products in the 60-second php execution time I’m allowed; I’m nervous but happy.
If you have any coding experience at all I’ll send you my code, but IT’S A HACK – sooner or later Michael has to take this one up properly. If you are not technical you might find this worse that keeping beating up on Michael.