Kid friendly fix for out of memory errors in Froyo
From the commentary, it appears that you are having install problems, that is, out of internal storage, NOT RAM problems. 

Assuming that's so, then NO, there isn't any real fix - you can't increase the internal storage of the device, you can only add a bigger SD card (external storage) and move apps to it. 

The best you can do is to borrow the device regularly and push apps off to the SD card before things start to go wrong.