If Tomcat needs more memory then you have to add the following line to the catalina config file.
Windows (catalina.bat)
set JAVA_OPTS=%JAVA_OPTS% -server -Xms512M -Xmx768M -XX:MaxPermSize=128m
Grails 1.2 default PermGen memory is set to 96MB. The Sun JVMs default is 64MB. (Java HotSpot VM Options)

