The SD card is used for storage, not as RAM. The out of memory error is low RAM.
Latest E70-2 firmware version is 2.0618.07.10 (*#0000# to check). Updates can be gotten via the Nokia Software Updater available at http://www.nokiausa.com/support/software/softwareupdate/1,8838,,00.html
And I'm using Opera Mobile, and haven't seen the insufficient memory error. Well, unless I try opening a 6MB .pdf in Acrobat Reader.