Malloc error "can't allocate region" failed with error code 12. Any idea how to resolve this?

Sounds strange, but I had the same behavior when main thread was overloaded.

Memory usage was optimal enough: instruments shows no leaks and live memory was about 2Mb, no memory warnings while running on a device, all massive allocation was done inside autorelease pools etc.

But there was very huge process of storing data to db (using Core Data) made on main thread. Just moving the storing code to background process like this

dispatch_async(dispatch_get_global_queue
  (DISPATCH_QUEUE_PRIORITY_DEFAULT, 0), ^{
  BOOL result = NO;
  result = [[DataManager sharedInstance] storeGuestsToDB];
  dispatch_async(dispatch_get_main_queue(), ^{
  //finalization
  }
}

fixed my problem.

Googling will reveal quite a few tutorials on using instruments to understand what is going on with your memory:

How to debug memory leaks: (tutorial)
http://www.raywenderlich.com/2696/how-to-debug-memory-leaks-with-xcode-and-instruments-tutorial

And another:
Finding Obj-C memory leaks (video)
http://www.youtube.com/watch?v=R449qEuexNs&feature=related

*There are many similar questions on stackoverflow you might benefit from.