I M also facing this same problem but i think i have figured out some other way to finish it. It is too long and tiresome but at least gives better result then awful MP4 quality.
Its true that it is RAM problem and it comes due to shortage of RAM. One can use Activity monitor to see RAM usage but i used FreeRam software ( u can get it free from App store). It used to crash when my free memory used to almost 0. I have MacBook pro with 4 GB Ram and 500 GB hard disk. My movie was only 3 min long and had all pictures and text in it. It gave 108 error again and again. I tried to check the limit of this error. It successfully converted when video length was around 1:30. It might be different on urs. So i divided into 2 parts. Exported in 1080p HD quality. Then in new project imported those two videos again, added one after another and then it exported successfully in 720p instead of 1080p. But its still way better than MP4 quality. However, problem is to adjust ur backgroud music so that they perfectly unite again. I know it will be hard for those who have very long movie but if its that imp than you should go for it. I think problem comes when you add pictures or text to the videos. If there are only videos then it does fine or maybe not if you do some advanced editing. It worked fine for me and took less than 20 MB RAM.
Or other solution is buy more RAM and install it if compatible with you mac.
I hope this helps.
PS . Do restart your comp and see to that your free memory is around 2.50 GB atleast. Rest do whatever you want to but just start your exporting after getting your free memory around 2.50 GB