OS X V10.7 Lion :: Virtual Memory SWAP Is Filling Up HD

I'm getting messages stating "Your Mac OS X startup disk has no more space available for application memory." I've determined that my system memory is rapidly reducing after the MacBook Air is left on with only the Activity Monitor and Terminal open. 

MacBook Air Stats:
11-Inch, Mid 2011
Processor: 1.8 Ghz Intel Core i7
Memory: 4GB 1333 Mhz DDR3
Graphics: Intel HD Graphics 3000 384MB
Software: Mac OS X Lion 10.7.3

My SSD drive space is rapidly reduced after the "free memory" is almost completed used - the MacBook then starts using the SSD drive as virtual memory and almost uses that space (I have a 250GB drive with 60GB available when I start the mac).Everything works great for the first 5-10 minutes, then I see the "free memory" decrese until it's down to about 30MB or so and then the SWAP used increases until my hard drive is almost totally out of space and gives me the error above. During this time the MacBook Airs little fan turns on.I can only use my Mac for about 30 minutes or so until I have to restart due to the HD being filled up by the virtual memory SWAP. The Mac is also very slow during this time as you can imagine.

Info:
MacBook Air, Mac OS X (10.7.3)