found the problem - memory leak snmpd
I am using net-snmp on an embedded device with relatively limited memory resources (64Mb to be specific).
I started noticing that the process of snmpd took more and more memory on each trap I sent from the device. The process reached around 20Mb of memory and then the memory usage stopped to increase. This memory usage was off course too big for my device.
Finally (using the great help of Bill Fenner) I understood the memory was taken by the notification mib module. I removed it from the modules and it solved my problem.
---------- Post added 12-04-11 at 04:28 PM ----------
Do you have the NOTIFICATION-LOG-MIB compiled into your snmpd? If so, it is keeping track of all the traps (well, the last 1000) that you've sent. This could explain the memory usage you are seeing.