From the <a href=”http://www.oracle.com/technology/products/jdev/htdocs/11g/knownissues.html#gi3″>JDevelopr 11g known issues page</a>:
Under certain circumstances, if you do not have enough free memory available, you may receive an error when running an application:
Error occurred during initialization of VM
Could not reserve enough space for object heap
Normally you would resolve this by adding -Xms and -Xmx arguments to the project’s Run/Debug profile. However, there are existing entries for these settings in the WebLogic startup that will override the project’s settings. The proper way to resolve this error is to add EXTRA_JAVA_PROPERTIES to your environment, as follows:
setenv EXTRA_JAVA_PROPERTIES “-Xms512m -Xmx512m”
set EXTRA_JAVA_PROPERTIES=”-Xms512m -Xmx512m”
Let us know if this helps.