I was growing increasingly frustrated over the last few days, experiencing problems very similar to others on this forum:
For me, the solution was simple and one I stumbled upon by accident: I chose a different menu.
I'd been using a disc menu with animated scene selections. Choosing a menu with static scene selection images enabled the burn to go straight to encoding the content of the disc, rather than first having to first churn through the encoding of three pages of scene selections. Apparently, having to digest what I believe amounted to multiple instances of the same scenes is what overwhelmed PE7, at least in my case.
No more memory issues, great disc in the outcome (about an hour and fifteen minutes in length).
Thanks for reporting your succes, SKT! Sorry that it came with some compromises though.