Why does heap space run out only when running JUnit tests?

When running JUnit tests, I always seem to run into this error:

eclipse outOfMemoryError: heap space

I have monitored Eclipse with JConsole and heap memory peaks at about 150MB. I have set heap memory to 1GB.

I am using the following arguments when starting Eclipse:

-vm "C:\Program Files\Java\jre1.5.0_08\bin\javaw.exe" -vmargs -Xmx1024M
-XX:MaxPermSize=128M -Dcom.sun.management.jmxremote.port=8999
-Dcom.sun.management.jmxremote.ssl=false
-Dcom.sun.management.jmxremote.authenticate=false

Does anyone know what may be causing this issue? It happens only when running JUnit tests.