Many OS 4 devices only had 256K for the dynamic heap -- the larger dynamic heap sizes didn't really start appearing until Palm OS 5. If you need that much storage, it might be worth only supporting OS 5 and later.
Is there a way to test for the available heap size? -- For information on using the PalmSource Developer Forums, or to unsubscribe, please see http://www.palmos.com/dev/support/forums/
