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I have a big dataset imported into ArcMap. For each point, I created a buffers of 200m. And I apply Intersect to all the buffers, resulting in a huge dataset of around 2183962 objects.

Previously, I have similar sets of data which are all significantly smaller than this, I export them to shapefile and by using the shapefile module, I created a Python script to extract each polygon (to be precise, each "Intersection") based on an attribute called bbox (in the Python shapefile module) and then do some other operations.

Now, because the dataset is too big, I wasn't able to export the dataset to shapefile since the limitation is 2GB although I manage to export to XML workspace of a file size around 13 GB.

Is there anyway around this?

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Instead of using shapefiles, extract data to feature class within a file geodatabase. See link below for size limits.

http://webhelp.esri.com/arcgisserver/9.3/java/index.htm#geodatabases/file_g-1445296021.htm

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one question. If I export to a file geodatabase, how can I extract the individual "Intersection" that I want? The reason I am exporting all data to shapefile and using Python to read and extract is because I am not aware of ArcMap to be able to extract/split the data into each "Intersection". –  thchew Mar 23 '12 at 2:13
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I agree with artwork21 that running the Intersect tool on a feature class in a file geodatabase will be the first thing to try. If that gives an error post it here along with the ArcGIS version you used and that may guide further suggestions. Running Intersect on 2 million buffered points is a big ask so you may need to use a tiling approach. –  PolyGeo Mar 23 '12 at 7:16
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