I upgraded my PHP install in DreamHost from 5.1.6 to 5.2.0, because judging from the fixes list, it actually seemed like a gooed idea. However, since I installed it, I have been facing this "out of memory" errors... it was not after a short while that I realized it was the version bump and searched bugs.php.net to see if there was anything related to it, and to my luck, bug #39438 was posted, reporting about a memory leak and PHP processes consuming noticeably more memory than the older PHP. Just a few moments ago, I checked in the bug and saw that they apparently implemented a fix in CVS for the PHP_5_2 branch.
Until the next version of PHP is stable, you might see some random errors like these (I also get them on my RSS aggregator I have around here, and on the blog admin pages... a lot... so I know I see them) on this blog:
Fatal error: Out of memory (allocated 7340032) (tried to allocate 311296 bytes) in ~/wp-content/plugins/sitemap.php on line 2275