Just to follow up on here: http://stackoverflow.com/questions/961795/creating-very-large-image-files-with-bufferedimage-strange-issues-depending-on-c
I still have the issue and I did try the Xmx command line to make sure the JVM had at least 1024m of RAM, I put the parametere in as both -Xmx1024m and -Xmx 1024m but neither worked.