High memory usage (PHP, Apache, ect) leads to caching which makes requests slow. I think the reason for your problem is that the subversion repo. you’re installing from ( probably the apache/php repos) is not compiled optimally for low memory. Most repos are compiled with broad support in mind, not low memory systems. The particulars of the VM virtual hardware also might be another reason.

If you insist on ONE, 246MB VPS:
1) Select a light, stable distros like CentOS. Don’t get bleeding edge versions of programs unless you need’em. Then go through and remove anything that isn’t absolutely necessary and is taking up memory. Use ‘top’ and ‘ps aux’ to find’em. Be smart about what you remove.

2) Don’t use Apache. Use a web server with a smaller memory footprint (ie- lighttpd, nginx). Compile both from source (and using ONLY the modules you need if nginx). Use some compiler optimizations . There are specific tricks for low memory systems. Google.

3) Next you should be caching aggressively either internally within WordPress or externally with a caching program. There is NO reason why you should have to run a script that outputs the same thing that it has outputted before.

4) Edit php.ini and web server configs. In php.ini increase max memory usage (yes, you heard me). In webserver config decrease number of max simultaneous connections (yah, you head me there too).

5) Create a separate user for the web server also. Use ‘ulimit’ to adjust max usage accordingly. ‘Unlimited’ doesn’t work when it causing your server to cache/crash. You’re better off dropping one user to a 500 error than serving the request and slowing down every other connected user in the process.