Use the sort command, it's optimized to sort large
files. It can figure out when to sort in memory, and when
to use temporary files. It's a standard Unix tool, and has
been ported to different OSses, including Windows.
...unless the file is truly huge. Sort has its limitations - for instance, on solaris it tends to use /var/tmp to store that temporary file, and if you're dealing with a few gigs worth of data, you can easily run out of even disk space for the tmp files (painful, true story). Not that I have a better solution :)
"I have never written bad code. There are merely unanticipated features."
Sure, there will always be limitations. But it's usually
cheaper/easier to add a few gigs of disk space than it is
to add a few gigs of RAM. (And if you do it in Perl, multiply
that by a factor as well). Typically, 'sort' will need free
disk space about the same amount as the file to sort is large.