Version 2.21 has been released and contains a bug fix for the XML Destination Adapter that was causing out of memory errors when writing XML documents of a significant size to the file system.
Please note that string variable output is still restricted to the memory that is available and addressable to the .NET framework so you are encouraged to only use that option for putting smaller XML fragments together to form complete XML documents and not for very large (100's of megabytes) XML documents as you can still receive out of memory exceptions when trying to store everything in memory.