...with three simple environment variables:

These environment variables tell ImageMagick to use far less RAM when performing image operations on large images - it'll continue to work fine with big images, it will just be slower as it will use mmap-ed scratch (not swap!) space. This is probably about right for a 512MB slice on SliceHost, but you could tune up for larger servers. (See the environment variable section of ImageMagick's configuration resource page for more technical details.)

Apply to production.rb, commit, deploy, and relax.