If you are getting the questioned error in the secondary Eclipse Application, adding -XX:MaxPermSize=512m in ini won't help. You need to go into debug or run configuration->arguments and add that piece in VM arguments.I also increased others memory limits so:
-Dosgi.requiredJavaVersion=1.5 -Xms120m -Xmx2048m -XX:MaxPermSize=1024m
It helped.
Edit. After some experiments I've found, that Eclipse does take memory limits from the ini file. But... it does it only once, at the creation of a new workspace. Parameters from -vmarg in eclipse.ini create the default VM parameters line. So, if you are working on the existing workspace, change debug or run configuration. But change eclipse.ini, too, for better future.
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