vacuum causes pg_xlog directory to grow until out of disk space.

I'm running PostgreSQL 7.1.2 on Solaris 8. The box is an Ultra 60 with
1GB of RAM. The database is on it's own 11GB partition which is
currently 93% full. I've since moved the pg_xlog directory to a
seperate 11GB partition.

We have one table which accounts for 90% of the database size. In
trying to vacuum this table, the pg_xlog directory reaches 100%
(starting from less than 1%).

In reading posts to this news group I've come across one suggestion
which talks about increasing the CHECKPOINT_TIMEOUT and
CHECKPOINT_SEGMENTS size. I will try that shortly.

Does PostgreSQL 7.2 address this problem? Any other suggestions?
Obviously, throwing more disk space at this would work but I currently
don't have that option.

Thanks,
Dave