Are you trying to install something or something just stopped working, that was previously working properly. If its the ladder than most likely there is an infinite loop somewhere. An infinite loop is normally the cause of such error on what was previously working. Otherwise, if your installing something you may in fact need to up the memory limit. I know I had to do that when installing Magento. I put it at something outrageous and switched it back after install. When you change it restart apache. If its still not taking than you may be in the wrong config file. Normally there are a few, that are just for example. Only one of them is actually the one in use though.
Unless the problem occurs when uploading files max_upload_filesize is not something you need to concern yourself with. It sounds like you’re creating a lot of objects/recourses but don’t clean them up properly.
Also note that PHP <= 5.3.0 has real troubles garbage collecting circular references (object A refers to object B, and object B refers to object A). Because the interpreter is not sure whether it could clear out the objects they’ll remain in memory and if that happens often enough you’ll clog the 128M in no time.