I helped Amanda in another discussion, so this one was never really answered here. The reason you are getting the error is because the system variable memory_limit is set too low for your server. The server is running out of temporary space while zipping up all the files.
You may be able to fix this by adding the following line to the second line of plog-download.php (just under the <?php ): ini_set('memory_limit', '500M');
This will only work if your webhost allows you to change some php.ini variables within a script (not all of them do). If that doesn't fix it, you will need to contact your webhost and have them increase the memory limit by editing the system php.ini settings in order to get the downloads to work fully.
Could disassembling the file be an option? Maybe coding in such a way that the upload allows for multiple files and a merging option so after the uploads occur the php code will assemble the files back into one piece and will do the gallery operations. Nice feature. Requires some investment, I think it is possible, but it is not there yet. Maybe do the numbers and see if this is cost effective.
Holly, Really it is limited by the hosting you are set on. If they won't allow a different memory_limit, I think that is really all you can do. btw, where are you hosting? I can take a look at their FAQ or customer service forums to see if someone else was able to work around it. I think your hosting company is really just looking for you to upgrade and not wanting to look into it for you (lazy customer service). One of my current hosts is very cheap, shared space and I can work around the memory_limit issue, so it should be doable.