Hi -
We had this same error previously, and it had to do with Java HeapSpace issues (memory management, and competing for RAM with SQL server).
Unfortunately, even setting the Java HeapSpace to the maximum possible on our servers (32bit OSs, Windows Server 2003, with 4G RAM), did not resolve the problem.
Our problems went away after we migrated up to SEP 11 MR4 MP2. We are still "right on the edge" with respect to RAM, but better efficiencies in the way SEP MR4MP2 uses SQL and Java must be the difference.
Our next plan is to migrate the database off the SEPM itself over to another SQL database purpsed server.
Doug