Problem with insert into select...

I'm having a problem with a queyr like:  INSERT INTO FACT (x,x,x,x,x,x)
SELECT a.key,b.key,c.key,d.key,e.key,f.key from x,a,b,c,d,e,f where x=a
and x=b ....   -- postgres7.4 is running out of memory.  I'm not sure
why this would happen -- does it buffer the subselect before doing the
insert?

Things are pretty big scale: 3gb ram, 32768 shared buffers, 700gb disk,
millions of rows in the tables.