pg_dump error - out of memory, Failed on request of size 536870912

Hello,

We have a bit of a problem with the daily db backup. At the moment the
backup db size is half of the main db, and we have the following errors
in the log file:

ERROR: out of memory
DETAIL: Failed on request of size 536870912

(There's a bunch of those.)

There were some 'permission denied for language c' errors earlier in the
log, but then the backup continued for a while.

This is the command we're running:

pg_dump -c -h $DB_HOST -U $DB_USER $DB_NAME | PGOPTIONS='-c
maintenance_work_mem=1500MB -c sort_mem=64MB'
psql --quiet -U $DB_DUMP_USER -h $DB_DUMP_HOST $DB_DUMP_NAME;

Both databases (main and backup) are Postgres 8.3.

I'd appreciate any suggestions on how to fix this problem. Also, if you
have a better idea on running a daily backup please let me know.
Thanks!

Marcin