There is no per-application limit so to say. The amount of memory available to an application depends on the amount of free memory, which again depends on the amount of memory used by applications running in the background. These apps include permanently running system apps like SpringBoard, sometimes running system apps like Safari, iPod, etc and (when iOS 4 will come for iPad) user-apps that still run in background.
Nevertheless, I'd say an app should never use more than 50% of all available ram. On iPad this currently means 128 MB and should be quite a lot. Did you do a leak check on your app?
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