On our production site our staff programmer Cliff found this issue, when we added the winter/spring 2008 students to the DB, then course level manual backup will not complete. We did some debugging and found that the function user_check_backup in /backup/backuplib.php were not implemented efficiently and would generate big memory footprint:

    function user_check_backup($course,$backup_unique_code,$backup_users,$backup_messages) {
        //$backup_users=0-->all
        // 1-->course (needed + enrolled)
        // 2-->none

        global $CFG;
        global $db;

        $count_users = 0;

        //If we've selected none, simply return 0
        if ($backup_users == 0 or $backup_users == 1) {
        
            //Calculate needed users (calling every xxxx_get_participants function + scales users)
            $needed_users = backup_get_needed_users($course, $backup_messages);

            //Calculate enrolled users (students + teachers)
            $enrolled_users = backup_get_enrolled_users($course);

            //Calculate all users (every record in users table)
            $all_users = backup_get_all_users();

            //Calculate course users (needed + enrolled)
            //First, needed
            $course_users = $needed_users;
        
            //Now, enrolled
            if ($enrolled_users) {
                foreach ($enrolled_users as $enrolled_user) {
                    $course_users[$enrolled_user->id]->id = $enrolled_user->id;
                }
            }
       
            //Now, depending of parameters, create $backupable_users
            if ($backup_users == 0) {
                $backupable_users = $all_users;
            } else {
                $backupable_users = $course_users;
            }

We rewrote it a little bit and are still testing the patch (patch is not included here in this ticket right now), but would like to create a bug ticket here so that people who are running large sites would aware of this issue. Thanks!