This issue is specific to amd64. On i386 the installation finishes without 
error.
Memory consumption on i386 is much lower than on amd64 (factor 4 to 8) 
The graph attached is for i386 on a VM with 512MB.

** Attachment added: "ubiquity_20120413_i386_04.png"
   
https://bugs.launchpad.net/ubuntu/+source/ubiquity/+bug/979350/+attachment/3060376/+files/ubiquity_20120413_i386_04.png

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https://bugs.launchpad.net/bugs/979350

Title:
  install with encrypted home failed near the end: OSError: [Errno 12]
  Cannot allocate memory

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