I don't think a .jar.conf file is looked at by the startup. But I could be wrong, only your host can answer that.
You are correct in that increasing the memory to 1Gb is not the same as adding the Permgen settings.
I did not mean for you to use a craftbukkit jar i my original post. It's just that on my particular host they have mulicraft setup that if it sees you using craftbukkit2383.jar then it uses a different startup parameter that actually has the permgen line in it. If I leave it on "default" then it uses the vanilla startup without permgen.
Initially on my host I had the drop down on "default" and the custom jar file was FTBServer.jar
Based on their recommendation I changed my dropdown to Mod: Crafbukkit Build Beta 2383 (1.6.2)
Then renamed my ftbserver.jar to craftbukkit2383.jar via ftp and then changed the custom jar file line to read craftbukkit2383.jar
This was their workaround for tricking the server into using their crafrbukkit startup config with the extra permgen yet still use FTB's jar file even though its been renamed.
Maybe check with your host if they have additional craftbukkit startup parameters and you may be able to do something similar.