Will Derby, H2, or SQLite give faster load time and/or smaller file size than HSQL?
You need a larger Java memory allocation and a larger HSQLDB memory cache size for faster loading of data into large tables. 

Add hsqldb.cache_rows=4000000 and hsqldb.cache_size=1000000 to the startup configuration for a new database.

http://hsqldb.org/doc/2.0/guide/dbproperties-chapt.html#dpc_db_file_mem