Memory exhausted in AllocSetReAlloc

Using CREATE INDEX on a large table (>70 million rows)
results in the following error:

ERROR:  Memory exhausted in AllocSetReAlloc(134217728)

(134217728 is exactly 128 megabytes).

The box has 2Gigs of RAM.
=> select version();
                               version
---------------------------------------------------------------------
 PostgreSQL 7.1.3 on i386-unknown-freebsd4.4, compiled by GCC 2.95.3

Is there anyway around this ?

--
Eric Cholet