pgsql functions and transactions?

I read the posts on pgsql functions and transactions from the Novice list, and I think they are saying "PGSQL functions
donot support transactions". Is this correct? Or is the idea that functions are automatically in a transaction? 

My functions are processing a lot of data, and I'm getting the following error after 2 hours of processing on my
developmentbox: 

WARNING:  ShmemAlloc: out of memory
WARNING:  Error occurred while executing PL/pgSQL function get_facility_percentiles
WARNING:  line 37 at execute statement
ERROR:  LockAcquire: lock table 1 is out of memory

I thought if I put begin transaction/commit transaction around pieces of the functions, the database could let go of
somelocks and I could process all the way through, as well as preserve some of the results. As it is now, I believe all
theresults are rolledback after the memory error. However, I cannot seem to get the begin transaction/commit in the
correctplaces. 

Any insight and/or assistance with how to solve this memory problem/rollback issue would be greatly appreciated.

Best Regards,

--
Betsy Barker
IT Manager
Support Services, Inc
(720)489-1630 X 38