Issues with pg_dump & pg_restore

I'm trying to make a copy of a production database that's running on a
RedHat 7.0 machines with posgresql 7.1.2 and moving it to a machine
running RedHat 7.1 with postgresql 7.1.3. The database has blobs so I
first tried

pg_dump -Ft -b docarc >docarc.tar

That failed with

Archiver(tar) could not write to member (18 != 85)

I then tried replacing -Ft with -Fc and that solved the problem. On the
machine I'm try restoring the database to my test machine with

createdb docarc
pg_restore -v -Fc -d docarc docarc.cust

It runs find until the "Create table for BLOBS xrefs" then it slowly
starts eating up all available memory. It eventually gets killed due to
no more memory. The system has 512Mb of memory + 128Mb of swap. The data
base has about 500,000 entries in one table with about a 3k blob for
each entry, the other table has about 1,000,000 rows.

Thanks,
Lane Rollins