Actually 200 odd MB of ram for LW in OSX is not too bad. Some earlier versions were much worse.

I think you're confusing ram with virtual memory (VM). Yes there is an issue with VM which is related to OSX's Java. If you had Tiger you could update to Java 1.5 but unfortunately Mac doesn't offer later Java versions to earlier OSX versions. Java on OSX is less than efficient & Java 1.4.2 does have problems. The programmers are well aware of OSX's java & VM issue & have been aware of it for a long time.

So what can you do about it? Easiest thing is when the VM gets too high, close LW & re-open & VM will go back to the initial level. (When you close a program VM used always disappears.)

Other things, keep your shares below 2,000. Make sure your incomplete list doesn't get too large. Tip: Purge the Downloads Queue! Both too many incompletes (especially) & too many shares add greatly to VM!!!

Set your uploads & downlds for autoclear. Close off search tabs that are hours old. I tend to clear them if theirs more than about 6 or 8 of them. Keep LW in the dock or hidden when you're not actively using it (ie: not searching.)

Don't use the Resume/Find Souces function on all your files simultaneously or else this will use up a lot of resources & add greatly to VM.

Anyway, just some tips on helping to reduce VM growth. Particularly less incompletes makes a huge difference.