I have seperated portals many times doing just what Chris said to do.  I create a duplicate of the entire site, all portals and the database.  Once I get the site running, I delete all the portals I don't want.  It works perfectly.  One step I usually do though is to add an additional portal alias to the portal I want to keep before starting the whole process. This way I can use my new alias to acess the copied installation while the old site is still alive.

The system.outofmemoryexception errors were really wierd. I would browse to the home page and then SQL Server would go from using about 100mb of system memory to 2000mb of system memory. After a lot of troubleshooting I had noticed my client had set the events module to have a cache value of 600. I changed this to zero and the problem is fixed.

The only way to fix this was to go into the database and find the TabModules table. Then I had to find the events module record and change the cache settings to 0. Now things work super fast and use very little memory.