If your conditions are complex and require you to write code, then the ConditionFormatting functionality probably won't be sufficient. 

Another approach you could take is using a DrawFilter. The advantage of the DrawFilter is that it only applies to the drawing layer. So it will only apply to cells that are actually on the screen. 

It's a little tricky because different cells may use different elements to draw their background or foreground, depending on the editor the cell is using. But for the most part, the DrawFilter would look something like this: 

    public class MyDrawFilter : IUIElementDrawFilter
    {
        public bool DrawElement(DrawPhase drawPhase, ref UIElementDrawParams drawParams)
        {
            var cell = drawParams.Element.GetContext(typeof(UltraGridCell)) as UltraGridCell;
            if (null == cell)
                Debug.Fail("Failed to get a cell; unexpected.");
            else
            {

                switch (cell.Column.Key)
                {
                    case "Int32 1":
                        int cellValueAsInt = (int)cell.Value;
                        if (cellValueAsInt > 2)
                        {
                            drawParams.AppearanceData.BackColor = System.Drawing.Color.Green;
                            drawParams.AppearanceData.ForeColor = System.Drawing.Color.White;
                        }
                        else
                        {
                            drawParams.AppearanceData.BackColor = System.Drawing.Color.Red;
                            drawParams.AppearanceData.ForeColor = System.Drawing.Color.Yellow;
                        }

                        break;
                }
            }

            return false;
            
        }

        public DrawPhase GetPhasesToFilter(ref UIElementDrawParams drawParams)
        {
            if (drawParams.Element is EmbeddableUIElementBase)
                return DrawPhase.BeforeDrawElement;

            return DrawPhase.None;
        }
    }

And, of course you have to attach an instance of this class to the grid. I would do this in the form constructor or some other event that only fires once before the grid paints. 

this.ultraGrid1.DrawFilter = new MyDrawFilter();

Having said that, showing such a massive set of data in the grid probably isn't a good idea. There are a lot of other operations that will fore the grid to load all of the rows and cell, such as filtering, sorting, printing, etc. And any f these will cause a serious performance hit in your application. You must be seeing a huge hit when you load that much data into the application, and another one when you bind the grid, even without the InitializeRow code. 

Also, no human used could possibly work with that much data at once in any useful way. You might want to consider implementing some kind of query interface where the user specifies some search criteria and you only pull down a subset of your data that they can work with. 

Hi Mike

Many thanks for your reply. Will try this approach and let you know if works

I know how it might look loading such massive data to grid, but this is very strict project requirement and has solid business case for such approach (believe me ive triple checked rationale behind...)

Ofc I can do similar thing using standard. Net components but I'd prefer to stick with infragistics :)

I confirm DrawFilter usage resolved this issue - thanks !

Also I found that Out Of memory issue will not occur  if app will be built as 64bit (instead x86/any CPU).

However I prefer to use DrawFilter as it gives much better performance / end user experience