Before revision:  We give a factor-2 approximation algorithm for Vertex Cover which runs in time n^{O(\Delta)} and uses O(\Delta log n) bits of space.
After revision:  We give a factor-2 approximation algorithm for Vertex Cover on graphs with maximum degree \Delta, and an algorithm for computing maximal independent sets which both run in time n^{O(\Delta)} and uses O(\Delta log n) bits of space.