What do the following show:
Code:
host `hostname` <- backticks not single quotes
dig steve.ac
dig steve.ac mx
Are there still the java VM errors in your zmsetup log? If there are you probably don't have enough RAM on your system (I know you said it's 1GB but that should be enough to get it running). Have you also disabled SElinux?
[edit] You can display the memory with the command 'free -m' - see what it says.