Ogr2ogr starts reading a large GML file with about 4 MB/sec and then decreases more and more. RAM consumption starts at 30 MB and now (after 5 minutes) it is already at 85 MB - still growing. The last working version I've found is 0.9.6. It takes around 7MB RAM and reads the file with 10-15 MB/sec. Already after 4 minutes it starts to write a Shape File (while 1.4.1 needs much more time). After 7 minutes the conversion has finished with a 190 MB Shape File.
The command I use is this one:
ogr2ogr -skipfailures -f "ESRI Shapefile" DGKLW.shp DGKLW.gml
If one of the newer ogr2ogr versions some when returns I do not know. Yesterday I started a conversion but today in the morning my computer did not react. May be ogr2ogr used in the meantime all of the 2 GB RAM and 4 GB swap ...
I will upload the GML and GFS file, so you have a chance to debug.