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Bump up your memory limit to 96M or higher and see if that fixes the problem.

If not, you’ll have to contact your web host to increase your PHP memory limit.

Are you actually able to change your PHP memory limit? (Some hosts don’t allow this)

Does your host kill long running processes?

Sorry, I wasn’t clear. Create a new file on your webserver with a .php extension (for example info.php) and put the following in it:

<?php

@ini_set('memory_limit', '64M');

phpinfo();

?>

Then navigate to that file with your browser. Find the “memory_limit” line under PHP Core and see if the first column (local value) shows 64M. If it doesn’t change to the value you are setting, then your host is not allowing you to change your memory limit.

Make sure you delete the file you created as soon as you are done! The phpinfo() output is not something you want anyone else to be able to view easily.

What version of PHP are you running (check the phpinfo output)? I just did a quick search and it sounds like some people have the same issue if their host is running an outdated version of PHP.

Hmm, php5.anything should be good.

What is the max_execution_time value in the phpinfo? If it’s really low (<30) that might cause problems.

I’m out of ideas though. This is a “generic” WP issue with plugin activation so some more Googling might turn up other ideas. I searched for “wp 500 on activate plugin”. The 500 is the Internal Server Error code.