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Is this screen shot from the Web Console?
If you add -verbose:gc to your command line, and look at the data printed out by that option, what does it give for the heap size (if you can't tell, just post one or two lines of the output).
By the way, you do not need to use a 64-bit JVM just to support multi-thread, 32-bit also supports it. And I hope that this setting is a typo: -XX:ThreadStackSize=256. 256 bytes is a rather small stack size!
Thanks for the reply
I increased the -XXThreadStackSize=256m and made the -XX:NewRatio=2