CF 8 JVM memory maxing out

["JNokes" <jnokes@xxxxxxxxxxxxxxxxxxxxxx>]

We are having issues with CF 8 and the JVM memory maxing out. We have moved a 
portion of our live traffic onto a new CF 8 environment and for the most part 
it's running OK. But occasionally the JVM goes out of control and eventually 
maxes out. We have one set of code in particular that runs fine on the old 
system, but on the new system it will max the JVM every time.

 New system: CF 8.0.1, Windows 2008 Enterprise, running on VMWare ESX. Two 
physical servers running 6 virtual webservers with each VM box getting 3.6gb of 
RAM.
 Old system: CF 7.0.2, Windows 2003 Enterprise. Three physical servers running 
12 CF instances.
 JVM: java.args=-server -Xmx1024m -Dsun.io.useCanonCaches=false 
-XX:MaxPermSize=512m -XX:+UseParallelGC -Dcoldfusion.rootDir={application.home}/

 The CF admin settings and JVM are identical on the old servers and new 
servers. Both servers run code from the same SAN unit and share the same 
database.

 One thing I noticed is the memory alert (mine is set to 750mb) snapshot dumps 
show there is free memory:
 JVM Memory Stats
 Free Memory : 223470824 bytes
 Used Memory : 828054296 bytes

 Many times the total JVM memory is high and never goes back down even though 
the used memory is low. For example, right now one virtual box has 797mb total 
JVM memory, but only 184mb used. Is the total JVM memory supposed to eventually 
go down?

 Since the new system is completely different, I'm having a difficult time 
diagnosing the source of the problem. Is it CF 8? Is it Java 6? Is it Windows 
2008? Or is it VMWare? Any ideas would be appreciated!