Out Of Memory Errors - Please Help

I'm running Rational XDE Tester -> which is a java-based QA program that tests other java programs.
I'm having numerous performance problems -> possibly a result of the XDE program manipulating a 11 MB XML file continuously.
We've tried to include the tag: -Xmx256M and -Xmx 256M
but to no avail
Does anybody have any suggestions for solving our performance problems?

Try the Garbage collection on the code and also increase the JVM in accordance with the system available memory.

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