Memory issues

Hi,
I'm using and Amazon ec2 instance with the following spec and the
application that I'm running uses a postgres DB 9.1.
The app has 3 main cron jobs.

*Ubuntu 12, High-Memory Extra Large Instance
17.1 GB of memory
6.5 EC2 Compute Units (2 virtual cores with 3.25 EC2 Compute Units each)
420 GB of instance storage
64-bit platform*

I've changed the main default values under file *postgresql.conf* to:
shared_buffers = 4GB
work_mem = 16MB
wal_buffers = 16MB
checkpoint_segments = 32
effective_cache_size = 8GB

When I run the app, after an hour or two, free -m looks like below ans the
crons can't run due to memory loss or similar (i'm new to postgres and db
admin).
Thanks!

free -m, errors:

total used free shared buffers cached
Mem: 17079 13742 3337 0 64 11882
-/+ buffers/cache: 1796 15283
Swap: 511 0 511

total used *free* shared buffers cached
Mem: 17079 16833 *245 *0 42 14583
-/+ buffers/cache: 2207 14871
Swap: 511 0 511

**free above stays low even when nothing is running.

**errors:
*DBI connect('database=---;host=localhost','postgres',...) failed: could
not fork new process for connection: Cannot allocate memory*
could not fork new process for connection: Cannot allocate memory

and
execute failed: ERROR: out of memory
DETAIL: Failed on request of size 968. [for Statement "
SELECT DISTINCT....

Thank you!