Photoshop isn't rendering anything, it's manipulating the bitmap data. When you render a scene in D|S (or any other 3d application) you are handling huge chunks of data, from the mesh and bitmap textures, and intensive calculations to generate the image data from them. There's no point in rendering all that blank background, and you need to make the elements you are rendering close to the size they will need to be in the finished artwork (or larger). If you want to render a significant piece of a large image you are going to have to bite the bullet and render large (pixel-large, file size is a consequence not a goal). You also shouldn't be saving as jpg, since that degrades the image every time you save and reopen - stick to non-lossy formats.

Of course that still leaves the problem of not successfully rendering and saving, but for that we need more information on your system, what applications and background toolsa re running, and what error messages you are getting. Can you render a scene with a few primitives at high resolution? How about a single figure (human or clothing) with the basic textures applied?