Start by lowering the MaxRequests perchild in the apache configuration 4000 is too high. Set it to 100.
You also will want a PHP accelerator installed: http://es.wikipedia.org/wiki/PHP_accelerator .
Your cpu isn't 97% in use, almost 1 process wants to run all the time. The difference is subtle but important.
1GB of ram is enough for well used site if it is setup carefully. Read all the performance suggestions linked to above.