When Word does a Mail Merge to printer, all the output is in a single Print
Job. 7Mb x 135 is approaching 1Gb which is quite a lot of /extra/ RAM even
by today's standards, and there is probably loads of extra overhead for
reasons I don't even want to think about!

One thing you can try in the simple case is to use VBA to do one merge per
record in the data source using a macro such as the following:

Sub PrintOneDocPerSourceRec()
Dim intSourceRecord
Dim objMerge As Word.MailMerge
'Dim strOutputDocumentName As String
Dim TerminateMerge As Boolean

' Need to set up this object as the ActiveDocument changes when the
' merge is performed. Besides, it's clearer.

Set objMerge = ActiveDocument.MailMerge
With objMerge

 ' If no data source has been defined, do it here using OpenDataSource.
 ' But if it is already defined in the document, you should not need
 ' to define it here.

 ' .OpenDataSource _
 ' Name:="whatever"

 intSourceRecord = 1
 TerminateMerge = False

 Do Until TerminateMerge
   .DataSource.ActiveRecord = intSourceRecord

   ' if we have gone past the end (and possibly, if there are no records)
   ' then the Activerecord will not be what we have just tried to set it to

   If .DataSource.ActiveRecord <> intSourceRecord Then
     TerminateMerge = True
   ' the record exists
   Else

     .DataSource.FirstRecord = intSourceRecord
     .DataSource.LastRecord = intSourceRecord
     .Destination = wdSendToPrinter
     .Execute

     intSourceRecord = intSourceRecord + 1
   End If
 Loop
End With
End Sub

You may also find the follwong useful:
http://word.mvps.org/FAQs/MacrosVBA/CreateAMacro.htm
http://word.mvps.org/FAQs/MailMerge/MergeStraightToPrintrWVBA.htm

Peter Jamieson