TileMill 0.9.0 on windows could barely touch a raster without crashing: #1355. Now TileMill 0.9.1 on windows can load rasters up to around 200 MB, but larger still crashes. My hunch is the problem is the data copying: #1363 and #1354, whereby the cp command runs out of memory. The next task is, on windows 7, to try returning to using symlinks (#1504), and then to see if large (~ 1GB) rasters work, which they should. There is nothing on the Mapnik or GDAL side that cannot handle rasters this size, as long as OVERVIEWS are built with gdaladdo.
fixed by mapbox/millstone@74e9b45. just touching a file of 300 MB with node's fs.readFile would crash instantaneously on windows.