Speaking from my personal experience, it's unlikely that its any problem with XML::Parser per se..

I finished parsing a 1.46 gb (yes, gigabytes :o) XML file using XML::Parser on Friday.. it takes close to 40 minutes, mine is not the most efficient code out there, but my machine only has 128 mb RAM, and about 600 mb in combined page files... This is on Windows 2000, btw.. so, some more information on the type of error might help..because I figure, if XML::Parser can handle a gigabyte or so of data, then its good for pretty much anything :o)