I have 5.8GB free on the disk where BOINC lives and 1.65GB of RAM free so I don't think that should make the app hit the wall?!

I have not tried r409 - will it run an a 3850 with 512MB RAM and 09-2010 drivers?
(
Edit: I'm running the r453 version - I cannot remember using r409? )
(
Edit 2: I just realized you ment CPU app r409 - I will try it and report back! 
)
The latest drivers gives me bluescreens that points at ATI2DVAG so I have rolled back to the last stable ones. Oddly enough the bluescreens started when the drivers changed names from ATI to AMD ...

Arnulf
Edit 3: I tried the r409 app but got a lot of errors like this:
Stderr output
<core_client_version>6.10.58</core_client_version>
<![CDATA[
<message>
- exit code -3 (0xfffffffd)
</message>
<stderr_txt>
In ap_gfx_main.cpp: in ap_graphics_init(): Starting client.
Error opening wufile in.dat: No such file or directory
</stderr_txt>
]]>
Will empty the cache and then try again - don't know if the r409 downloads other WU's than the V8?
Arnulf