problems with XY package

I tried to use Prosper with some latex stuff i have that uses 
the XY package. I therefore added the line 
\usepackage[all]{xy}
in the preamble.

It did not work. It complains thus:

! TeX capacity exceeded, sorry [pool size=70947].

As an attempt to solve this problem, i created a file texmf.cnf with the line
pool_size = 300000 
(in the past i had a similar problem with pool size and i solved it
that way). It still does not work.

As a try, i run the same slides using "seminar" instead of
"Prosper" and it worked perfectly. 

Does all this mean that the XY package cannot be used with Prosper?
Otherwise, any suggestions? 
Thanks
Davide


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