Working with very large SQL Compact files, you may run into two issues:

 

1.     Manipulating a large SQL Compact database in VS 2008 IDE requires a hotfix

 

http://support.microsoft.com/kb/968436

 

Error message when you use the Visual Studio 2008 IDE to manipulate a SQL Server Compact 3.5 Database file which is larger than 128 Megabytes: "The database file that is larger than the configured maximum database size"

 

2.     Upgrading a very large database from SQL Compact 3.1 to 3.5 requires another hotfix

http://support.microsoft.com/kb/971027

FIX: Error message when you upgrade a very large database to SQL Server Compact 3.5: "The database file is larger than the configured maximum database size. This setting takes effect on the first concurrent database connection only"

Hotfix 3.5.5692.12 fixes a problem where large SQL CE database upgrade fails with an error:

The database file is larger than the configured maximum database size. This setting takes effect on the first concurrent database connection only. [ Required Max Database Size (in MB; 0 if unknown) = <size>]

Depending upon the file-size and available resources on the machine, the upgrade process for a very large database may consume significant memory.  This is expected behavior.   You may want to stop other applications to make room for the Upgrade process to complete.