Free memory shouldn't bee too telling. iPeng uses iOS' caches to keep things like artwork in memory wherever possible. However, these caches should only grow if there is really free memory available (and not e.g. throw out other Apps in the background) and they should get purged by the OS if memory is scarce. The one thing that doesn't always help against is heap fragmentation, maybe that was an issue at hand here, iPeng doesn't yet use ARC so it's a bit more susceptible to that.
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