You're only going to suffer notable performance degradation before going OOM if you have little enough system memory that the game digs in to the swap file significantly. As a 32 bit app though, Elemental can't use more than 2GB no matter how much you have.
I can understand now how my trick of running another application in the background, then shutting it down so i can save the game worked with DA.... but the out of memory error with DA did not divert straight to closing the game like the one in Elemental, somehow i was able to recover out of the out of memory error in DA (after closing the spare application to free up memory)?
You can't reduce the framerate and expect memory utilization to go down, it doesn't work like that.
Turn it the other way round - when the memory utilization is at capacity and you have an expanding game running then the framerate goes down as a result, this is how most other games function - the memory never 'runs out'. Which may well be how Elemental would work if;
One of the issues we're dealing with is that certain internal functions in ATI's x64 drivers don't recover used memory... ever.
In which case it is in the hands of the experts at Stardock to figure out - i hope they win!
As others have pointed out, if you're on a 64 bit OS and have OOM issues frequently (not everyone does), you can give the large address header patch a try but we can't support that ourselves. It might cause some DirectX issues but should improve your memory longevity considerably.
Definitely worth a try!