I get that message too about ZFS WARNING needing to be more then 512MB for pre fectching to work properly.
That's just a warning and you can choose not to use ZFS when you create your volume, the wiki suggest UFS for low end machine with less than 4gig of memory.
The real issue is Jul 15 03:30:06 freenas kernel: pid 1479 (python), uid 0 was killed: out of swap space
Meaning you are running out of memory and the OS is closing down processes.
Here's one thing I notice that I overlook, if you have build-in video card, you might want to disable the share memory for the video card in the BIOS.
I was running on 128MB of ram perfectly fine but I don't have shared memory with my video card.