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128 MB is not enough memory. I'd suggest at least 512 MB, maybe more if you are also running an X-Windows environment. The Oracle software takes about 2 GB of disk space. It can take more or less depending on the options you install. But the database itself can typically take up much more disk space.
For Oracle clients, migration to 10g is easy. Oracle9i shops can migrate to 10g in less than an hour. (Yes, that's right -- less than an hour.)
The migration to 10g is most exciting for shops that are still using rule-based SQL optimization. When migrating to 10g, the Automatic Database Diagnostic Monitor and the SQLAdvisor utility quickly identifies sub-optimal SQL statements.
Excerpted from SearchOracle.com news writer Rob Westervelt's report with Don Burleson, "Getting a look at 10g."
For a database upgrade from 9.2.0.4 to 10g, I would follow the upgrade procedures provided by Oracle's documentation in most cases. If the database required some physical reorganization, one could choose to utilize the online reorganization features or do an export and import to change the physical attributes of the database organization.
To upgrade 9iAS to OAS 10g, you'll need to follow the upgrade guide for your platform.
The answer depends on which version of Oracle8i you currently are running. If you are running Oracle 8.1.7, then you can upgrade directly to 10g. If you are running Oracle 8.1.5 or 8.1.6, then you must upgrade to either 8.1.7 or 9.0.1 or 9.2.0 before you can upgrade to 10g.
NOTE: For more information on when and how to upgrade to Oracle10g, read the Q&A interview with Ken Jacobs, Oracle Corp.'s vice president of product strategy for server technologies and the man known as Dr. DBA.
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