HSQLDB doesn't store everything in memory when CACHED tables are used. You can 
currently store up to 2GB per database. The limit is due to rise to 8GB in the 
next version due by April (this is a real date as it is tied with the release 
of OpenOffice.org 2.00). So you will be able to start with HSQLDB for smaller 
setups and let users move to whichever RDBMS they use in house for larger 
deployments.

Fred Toussi
Maintainer, HSQLDB Project

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