Is it good to have a lot of memory heap?

Hi!
I have a java applications that makes transactions. I have
configured 256 MB of heap memory. But when the
java process carries "n" transactions, it is going
very slow. However I have changed to 128 MB of heap memory and
I haven't had any problem with the java process.
Why with 128 MB it's ok and with 256 MB not?
Does anyone know anything about this?
Thanks

The version is java 1.2.2_07.
But I think that the garbage collection (gc) works in this way.
I mean if the memory heap is very high the gc java 1.2.2_07. doesn't work until the memory heap has been completed and when this happen the gc begins to free memory heap. I think that this situation can happen always and at this moment the java process will run very slow. But I am not sure.

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