diff: memory exhausted

[Shaun Jackman]

I'm running diff on two files of 200 MB each. During the run I see no 
output, only
        diff: memory exhausted

The two files aren't particularly unusual. They're both output from 
the program xxd.  The system has a fair chunk of memory free.

             total       used       free     shared    buffers     
cached
Mem:        224424     112228     112196          0       5212      
40544
-/+ buffers/cache:      66472     157952
Swap:       249944      79056     170888

Is this result expected?

diff (GNU diffutils) 2.8.1

Please cc me in your reply.
Cheers,
Shaun