MATLAB "out of memory" error
pack
does a memory defragmentation. It might help you a bit as far as the contiguous memory available.
Remember, when MATLAB says it's out of memory, it means it's out of contiguous memory, so rebooting or restarting MATLAB may work.
But, I'd recommend optimizing your code and identifying how you're eating up so much memory. It could be an ill-designed recursive loop, or a bad indexing function (using doubles instead of logicals to index a huge matrix).
I practically lived with memory errors for a while since I was dealing with huge datasets, but there's always a workaround, ask specific questions and you'll be surprised.