Plsql Function with error: No space left on device.

HAllo!

I have wrote a function. If I call this function the following output
appears:

psql:restructure.sql:139: ERROR: cannot extend image: No space left on
device.
Check free disk space.

My Postgres version is 7.1.2
My Server has the following data:

Main memory size: 510 Mbytes
1 GenuineIntel Pentium III (Coppermine) processor
1 vga+ graphics device
1 keyboard
1 parallel port:
lp0: base 0x378, no irq, no dma, modes SPP,ECP,ECPEPP,ECPPS2
PCI bus devices:
Host bridge: Intel 440BX - 82443BX Host (rev 3).
PCI bridge: Intel 440BX - 82443BX AGP (rev 3).
ISA bridge: Intel 82371AB PIIX4 ISA (rev 2).
IDE interface: Intel 82371AB PIIX4 IDE (rev 1).
USB Controller: Intel 82371AB PIIX4 USB (rev 1).
Bridge: Intel 82371AB PIIX4 ACPI (rev 2).
SCSI storage controller: Adaptec AIC-7890/1 (rev 0).
PCI bridge: DEC DC21152 (rev 3).
Ethernet controller: Intel 82557 (rev 8).
Multimedia audio controller: Ensoniq ES1371 (rev 8).
Multimedia video controller: Zoran ZR36057 (rev 2).
VGA compatible controller: Matrox Matrox G200 AGP (rev 3).
Display controller: Matrox Matrox G200 AGP (rev 3).

This is the function:
CREATE FUNCTION series_image () RETURNS integer AS '
DECLARE

psr_rec record;
i integer := 0;

BEGIN
FOR psr_rec IN SELECT * FROM relseries_image000 LOOP
UPDATE image
SET seriesoid = psr_rec.parentoid
WHERE chilioid = psr_rec.childoid;
i := i + 1;
END LOOP;
IF NOT FOUND THEN RETURN -1;
ELSE RETURN i;
END IF;
END;

' LANGUAGE 'plpgsql';

I saw during the execute of the function that the Ram was fully used and
also the swap space was also fully used.

How could I optimize the function above with new constructs of 7.1?

the table relseries_image000 has ca. 3 Millions of rows. Every row has 3
columns.

Thank you in advance for your help

David